Monsanto plans to close down three R&D centers in 2016, cutting out about 90 jobs
Missouri agrichemical giant Monsanto announced Monday that it will close down three research and development centers in 2016, cutting about 90 jobs.
Reuters reported that the move is done to cut costs on its restructuring operations that are necessary for the dwindling agricultural commodity market. The R&D centers that will close down are in Middleton, Wisconsin, which will be closed down in the first half of 2016. The other center is in Mystic, Connecticut, which will be closed in the second half of 2016. These centers are focused on seed trait development research. The third one is the Research Triangle Park, North Carolina, which works primarily on plant screening and phenotyping. It will be closed down in the second half of 2016. These centers employ about 166 workers, 65 of which will be moved to Chesterfield Research Village in St, Louis, Missouri.
According to Triangle Business Journal, Monsanto representative Lee Quarles said, "We determined that significant synergies could be realized by relocating some of the research that is currently being explored at the Research Triangle Park facility to St. Louis."
"This move will enable stronger collaboration, create efficiencies and agility in our operations and communications and reinforce the convergence of our R&D platforms," said Quarles.
Earlier this month, Agri Pulse reported that Monsanto announced a 15.5 percent slump in net income to $2.314 billion during the end of the fiscal year in August 31. Monsanto blames the decline in commodity prices and cost of restructuring operations for the down turn of the company's income. Low commodity prices are expected to continue for the fiscal year 2016, which is why the seed giant is also planning to cut jobs. On a report in October 7, Monsanto estimated a $5.10 to $5.60 per share earnings. This is a decrease from last year's $5.73.
The workers were told about the cuts Monday. Those who were offered to transfer in St. Louis but decided not to go will get a severance package, according to Monsanto. Other affected employees will also get severance packages from the company, which also includes pay, education assistance, and extended benefits.