Yesterday the EWC opinion was published. Here are some interesting excerpts. Mostly for US colleagues' benefit, to demonstrate that these layoffs have been sloppy and arrogant across the board, even with supposedly authoritative bodies, Cargill has behaved like a "we do what we want and don't need your say so to do it". It appears whoever was in charge of communicating with EWC during the consultation has been endlessly stalling the requests for meaningful information, "just becase":
- The EWC regrets that the overall obtaining of quality information from management has been a very challenging and gradual process.
- The EWC is disappointed that at the annual EWC plenary meeting on 27th November 2024 senior management missed the opportunity to demonstrate trust and openness
by presenting the 2030 Strategy without any reference to the magnitude of the job-cuts which were announced only two working days after the meeting.
- The EWC regrets that management remained extremely reluctant to share substantial information on the financial business rationale of the proposed reorganization. Certain key aspects on the financial implications of the restructuring in Europe remained unresponded
- In terms of confidentiality, the EWC is of the opinion that the classification of information as ‘confidential’ was imposed on the EWC in an overly restrictive manner and has created unjustified obstacles between European and local employee representative bodies from the very beginning of the I&C process
- In terms of communication in the European countries affected by Cargill 2030, the EWC observed a variety of approaches locally and based on employee feedback notes the communication towards the employee base in majority of countries was rather poor, especially in countries where no local works councils exist and legislation is less protective.
- The EWC has also been made aware of certain countries where EWC members were not permitted by management to support the local process e.g. by attending consultation meetings.
- although there was a significant amount of information shared on the strategic
considerations of management, this process was instigated way too late to allow for any meaningful consultation. Management confirmed to the EWC that key decisions on the outlook of the business model had been taken by a confined team of high-level managers without involving management at country level. As the future design of the enterprise/function structures and positions required had already been designed top-down before entering into social dialogue, the engagement with the EWC was of a limited value and could not lead to any material outcome for the people impacted by the restructuring.
- The Cargill 2030 Transformation is said to be substantially motivated by the
declining ROIC, falling under the Weighted Average Cost of Capital (WACC), resulting in value deterioration in recent quarters vs. previous periods and both in terms of internal targets and external benchmarks. HOWEVER, Cargill generated a remarkable net profit in the past financial year. Although the reported Adjusted Operating Earnings (AOE) demonstrate a significant decline in comparison to the exceptional record net profits during Covid years, Cargill can still be considered as a financially healthy and
prosperous company. The financial gains accumulated during the pandemic should have allowed management to display more endurance in approaching current headwinds and to respond in a more people-oriented manner other than reducing +8.000 positions globally.
- The announced restructuring coincides with media reports according to which Cargill has made a one-off dividend payment to the owners of Cargill. Cargill as a non-listed company is under limited legal obligation to disclose financial data to the market, but the lack of transparency displayed by management on the profit spent is considered as counterproductive for seeking employee understanding and support for the current
restructuring
- The EWC has been made aware that a number of businesses are underperforming and only 25% of Cargill operations meet the financial expectations of management. While ANH appears to be quite strong in the respective market and surpassing its competitors, concerns from ANH employees shared relate to the business still being expected to reduce staff
- Despite all reductions in the organization, it is stated the proposed changes are not aiming to do more with less and that thorough considerations in enterprises and functions were done to identify what work can be prioritized or stopped. a concern remains on how this will successfully be put into practice without jeopardizing business continuity, especially having in mind how challenging quite smaller past transformations aiming to implement simplification and standardization have proved to be
- The EWC has no evidence of existing risk assessment on the outcomes from the Transformation and, based on answers provided by management, it appears such analysis and mitigation plans are yet to be performed by HR Business Partners and business/function leaders going forward in the implementation of the new structure and ways of working. The EWC identifies this top-down approach as an important
unknown and bold risk of the Cargill 2030 strategy implementation, as such analysis and plans would have better been developed prior to implementation. The EWC is concerned with such an approach it may well be that after some time certain roles which have been eliminated might be needed again, resulting in knowledge-loss, unnecessary costs and time-investment and negative psychosocial effect on wrongly
dismissed employees.
- The EWC notes the proposed changes cover various countries, teams and roles and, although it is stated there is no prioritization of countries, the EWC notices a significant impact refers to countries with higher cost of employment and higher bands.
- the EWC has not been provided with clear evidence that the proposed Transformation
will lead to a flawless fit for purpose design or that this Transformation is the most successful approach to address the perceived declining ROIC and secure the future, both of the financial performance of the company and the employee’s positions. Other key elements include: the loss of knowledge and talent as consequence of the dismissals, the unclear criteria used for the impacted roles’ selection, unknown risk
mitigation plans related to opening gaps, potential excessive workload, how the company will manage to re-engage the retained employees, insufficient financial figures to anticipate future performance. Given the financial strength of Cargill, the EWC considers the company could have handled this Transformation with a more people-first mindset.
There was subsequently a "reasoned response" from Cargill "Management" towards EWC, addressing most points but I'll let you guess what that response was. In the end , they wrote a letter ("Response") and formally consider the matter closed.