By Sneha Shankar - Syngenta AG (SIX:SYNN), the world's largest producer of crop chemicals, said Monday that it will cut or relocate nearly 1,800 jobs as part of its efforts to save $1 billion by 2018 and boost earnings. The Basel, Switzerland-based company reportedly lags behind competitors.
The company employs about 28,000 people in 90 countries and said that about 500 positions will be affected in Basel as part of the job reductions, a bulk of which will take place next year. The company reportedly has about 3,400 people on its payroll in Switzerland and said in a statement Monday that it plans to save a total of $265 million in 2015.
“We remain committed to Basel as our headquarters and value this country's position as a center for business and innovation, as evidenced by our significant ongoing investments here. We undertake to carry out the planned job reductions and relocations in a socially responsible way,” Mike Mack, Syngenta's CEO, said, in another statement Monday.
The company will also try to increase outsourcing of its research and development programs, which is expected to help the company save about $50 million in 2015. Syngenta also plans to cut overhead costs by shifting some of its activities and jobs to lower-cost locations, along with a more efficient logistics model, a move that is expected to help the company save about $100 million in 2015.
Syngenta is struggling to compete with rivals liMonsanto1|Monsanto Company}} and Bayer CropScience, and the company’s stock has fallen more than 9 percent this year, Bloomberg reported. The company’s margin on earnings before interest, taxes, depreciation and amortization stood at 19.6 percent last year, while Monsanto’s stood at 30.1 percent and Bayer CropScience’s stood at 25.5 percent, the report added.
“The savings program is so far not yet fully mirrored by consensus numbers,” Markus Mayer, an analyst at Helvea Baader Bank, said, according to Bloomberg.