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AGCO Corporation (NYSE:AGCO) shares are trading lower on Tuesday.
In an exchange filing, the company announced a restructuring program, flagging an increased weakening demand in the agriculture industry.
The initial phase of the program will result in a net reduction of the company's salaried workforce by up to approximately 6% as compared to its salaried workforce as of December 31, 2023.
The first stage of the program aims to cut structural costs, streamline the workforce, and improve global efficiencies by adapting corporate and back-office functions, optimizing technology use, and leveraging global centers of excellence.
AGCO estimates it will incur charges for one-time termination benefits in connection with this phase of approximately $150 million to $200 million.
The company expects most of these cash charges to be incurred in 2024 and the first half of 2025.
AGCO expects annual run-rate benefits and cost savings of approximately $100 million to $125 million from this phase.
Also, the company expects to evaluate other opportunities to further enhance operating efficiencies that could result in additional restructuring charges from future phases of the program.
According to Benzinga Pro, AGCO stock has lost over 25% in the past year. Investors can gain exposure to the stock via Global X AgTech & Food Innovation ETF (NASDAQ:KROP) and ETF Series Solutions Distillate Small/Mid Cash Flow ETF (NYSE:DSMC).
Price Action: AGCO shares are trading lower by 3.89% to $97.91 at last check Tuesday.
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