Hormel Foods plans to eliminate 250 positions through a mixture of voluntary early retirements and layoffs as part of a corporate restructuring.
The company said yesterday (4 November) it is closing a number of open roles and trimming select office positions. A voluntary early retirement scheme has also been introduced for some non-plant employees.
The move is “designed to thoughtfully align resources with the organisation's strategic priorities, support future growth and strengthen the overall business”, the owner of Spam and Planters brands said in a statement.
John Ghingo, president of Hormel Foods, said: “We're directing resources toward technology, innovation, food safety and quality, and the capabilities - including people capabilities - that will shape our future.
“We're confident that our ongoing investments will strengthen our brands, improve efficiency and ensure Hormel Foods stays competitive and responsive to the needs of our consumers and customers.”
The Austin, Minnesota-headquartered group expects to record restructuring charges of $20m to $25m, largely tied to one-time pension benefits, cash severance, stock-based compensation and employee benefit costs.
Most of the charges are set to be recognised in the fourth quarter of fiscal 2025 and the first quarter of the new financial year, it said.
In August, Hormel cut its forecast for annual underlying earnings after “disappointing” profits in the US manufacturer’s fiscal third quarter.
Last week, in an update for the fourth quarter of fiscal 2025, which ended on 26 October, the company said it anticipates recording non-cash impairment charges, mainly related to its international segment and snack nuts business.
Hormel added it expects a “strong” top line amid “sustained demand across its retail, foodservice and international businesses”, led by turkey products and the Planters snacks brand.
Net sales for the quarter are projected at the upper end of its guidance, while adjusted earnings per share are forecast around $0.08 to $0.09 below its previous expectations.
In August, Hormel issued guidance for its fourth quarter projected sales of $3.15-3.25bn, which would represent organic growth of 1-4%. Diluted EPS was estimated at $0.36-0.38 and on an adjusted basis $0.38-0.40.
Hormel is also spinning off its Justin’s nut butters and chocolate snacks brand through an agreement with Forward Consumer Partners.
The New York-based private-equity firm will acquire a 51% stake, with Justin’s set to operate as a standalone business under a new CEO. Hormel will retain a 49% share.
