USA poultry giant Pilgrim’s Pride is to cut about 335 jobs by the end of the month, as the company fights to stay afloat with one independent analyst recently predicting that bankruptcy was “highly probable.”
The nation’s largest chicken producer said the cuts represent less than 1% of its total workforce. Pilgrim’s Pride has seen its profits shrink on the back of high commodity prices for key inputs like maize (corn) and energy.
It hedged some of its purchases, but as prices moderated, it lost money on those hedges. The company said in late September it would post a “significant loss” in the fourth quarter, largely on those bad hedges. It has not yet said when it will release its fourth-quarter results.
Additionally, Pilgrim’s Pride is saddled by debt due to its $1.3bn (£0.9bn) acquisition of rival Gold Kist early last year.
In a statement, the company said: “Our company, like the wider industry, is facing the toughest operating environment in decades, and it is absolutely critical for Pilgrim’s Pride to continue to do everything we can to operate our business as efficiently as possible.” This included the company exercising its 30-day grace period in making a $25.7m (£17.2m) interest payment which was due on 3 November.
Fears of the company failing were raised by research company CreditSights, which said: “When that grace period runs out, a bankruptcy scenario now seems highly probable.”