Following its disappointing third-quarter earnings reported on Oct. 24, Canada-based fertilizer and industrial feed products manufacturer PotashCorp (NYSE: POT) announced today it was reducing its work force by 18%, equal to more than 1,000 employees. The majority of the job reductions will take place by the end of this year, according to PotashCorp.
PotashCorp's Canada operations will undergo approximately 570 job cuts, including 440 reductions in its home region of Saskatchewan, and another 130 lost jobs in New Brunswick. In the U.S., Florida will be hit the hardest as PotashCorp said an estimated 350 employees will lose their jobs, effective the second half of 2014, followed by 85 employees in North Carolina, and approximately 40 people in "other U.S. locations and Trinidad."
Commenting on the decision to cut the jobs, PotashCorp President and CEO Bill Doyle was quoted as saying, "We understand the impact is not only on our people, but also in the communities where we work and live, and PotashCorp will work hard to help those affected through this challenging time."
Weak overseas demand and pricing pressures, PotashCorp said in its third-quarter earnings report, were largely to blame for reduced margins across its PotashCorp and three nutrient business lines, and contributed to significantly lower earnings compared to Q3 of last year. Third-quarter 2013 earnings were $0.41 a share, compared to $0.74 a share in PotashCorp's year-ago quarter.
At minimum, PotashCorp expects to take a $70 million charge in 2013's Q4 related to severance packages. Additional writedowns are possible, the company said, contingent upon a review of assets associated with the closing or scaling back of its facilities in the affected regions.
The company controls more than 25% of the world's supply of potash, which helps farmers boost crop production. Potash has been selling for around $300 per ton, about $100 less than earlier this year.
-- Material from The Associated Press was used in this report.