Tyson Laying Off 15 Percent of Senior Leadership, 10 Percent of Corporate Workers

Workers leave the Tyson Foods pork-processing plant in Logansport, Ind., on May 7, 2020. (Michael Conroy/AP Photo)

Tyson Foods will slash its senior leadership and corporate roles in a bid to improve efficiency, which comes as the company reported dismal financial numbers in the first quarter 2023 fiscal year.

In a memo (pdf) to employees on Wednesday, Tyson Foods CEO Donnie King said that one of the ways the company plans on boosting efficiency is by removing duplication of work. “As we look toward our future, we must also consider the roles and staffing levels across our teams and prioritize work that drives value for our customers and consumers. This means making the difficult but necessary decision to reduce headcount across the organization,” the memo said.

“These efforts have primarily focused on reducing enterprise-wide corporate overhead, which includes eliminating approximately 15 percent of senior leadership roles and 10 percent of corporate roles.”

Tyon, based in Springdale, Arkansas, intends to discuss the headcount reduction with a majority of team members this week. All decisions regarding reducing the headcount will be implemented in accordance with “all local requirements.”

Tyson’s plan to lay off workers comes as the company has been struggling financially. In the first quarter of fiscal 2023 that ended on Dec. 31, Tyson reported an adjusted operating income of $453 million, down close to 70 percent from the $1.43 billion in first quarter 2022 fiscal year. This happened despite sales jumping from $12.93 billion to $13.26 billion during this period.

The company’s CEO blamed “market dynamics and some operational inefficiencies” for negatively affecting the firm’s profitability in the first quarter. Over the past year, shares of Tyson Foods have fallen by around 35 percent as of April 26. It is down more than 5 percent year to date.

Layoffs, Automation

Tyson employed roughly 6,000 employees in the United States in corporate offices as of Oct. 1, 2022. It also had 118,000 workers at non-corporate sites like warehouses and meat plants.

Most of the eliminated roles in senior leadership are the posts of senior vice presidents and vice presidents, a company spokesperson said, according to Reuters.

Back in October, Tyson announced that it would relocate all its corporate jobs to the Springdale headquarters, which led to some corporate employees quitting.

The recent memo also highlights the company’s push toward automation. “We have increased efficiency through greater capacity utilization across our plants, closing less productive facilities and investing in digital-forward plants,” the memo said.

“We have made advancements in technology and automation, accelerating how we do difficult, repetitive, and hard-to-fill jobs in our plants. Additionally, we are utilizing technology to improve self-service for administrative tasks across all facilities.”

In December 2022, Tyson announced that it would invest $1.3 billion in automation through 2024 to cut down labor expenses and boost production. This month, the company revealed that it was testing out self-driving trucks in Texas.

Shutting Down Operations

Over the past few months, Tyson Foods has announced closing down multiple offices and plants. In October, when the company announced moving corporate positions to Springdale, the firm’s offices in Chicago, Illinois, and Dakota Dunes, South Dakota, were shuttered.

Last month, Tyson said that it would close down two chicken plants on May 12. One of the plants is located in Glen Allen, Virginia. The shutdown will affect 692 workers. Another plant closure, in Van Buren, Arkansas, will affect 969 employees.

The company’s announcement had attracted criticism from the United Food and Commercial International Workers Union, which represents employees at Tyson’s plant in Virginia.

“These men and women risked their lives and the safety of their families to keep this plant operational during the pandemic, and this is the thanks they get?” the union said in a statement.