ADM has begun closing domestic trading operations in China and laying off people

ADM has begun closing its domestic trading operations in China and laying off staff in its largest business segment as part of a cost-cutting drive, the company said on Monday. Reuters reports.

The move is designed to help ADM, which has been embroiled in an accounting scandal since last year, “remain agile in a challenging environment,” the company said in a statement.

The company did not disclose the number of layoffs, but a source familiar with the matter said the job cuts would affect 40 to 50 employees, leaving only about 10 employees in the financial hub of Shanghai.

“The entire Ag Services and Oilseeds team in China has effectively been laid off,” the source said, referring to ADM’s largest business segment.

A second source said the layoffs would affect about 30 people at ADM’s Toepfer Shanghai subsidiary starting this week and were part of a global cost-cutting effort announced earlier this year.

Rising trade tensions between Washington and Beijing are creating new headwinds for ADM, which relies on trade between the United States and China.

The suspension of domestic trading at Toepfer Shanghai is expected to end by the end of September, ADM said in a statement, adding that its other Shanghai operations will not be affected.

ADM began the layoffs in February as part of a broader cost-cutting program to save $500 million to $700 million over the next three to five years. The company reported its weakest adjusted fourth-quarter profit in six years.

ADM shares rose 1.3% to $46.43 on Monday after falling last week to their lowest level in nearly five years.

Tags: China