Archer-Daniels-Midland (ADM), the global grain trading giant, is scaling back its operations in China by winding down its domestic trade activities and initiating layoffs in Shanghai. This strategic move comes amid a broader global cost-reduction initiative and follows a series of financial setbacks for the company. According to multiple media reports, ADM has begun shutting down its domestic trading unit at Toepfer Shanghai, a subsidiary located in the city's financial district, with the phase-out expected to be completed by September 30. Despite the shutdown, ADM confirmed that its other business operations in Shanghai will continue unaffected.

This decision aligns with ADM’s efforts to maintain operational flexibility during a period marked by economic and geopolitical turbulence. The company is grappling with a decline in crop prices, weakened consumer demand caused by inflation, and shrinking profit margins in its processing operations. These factors have significantly impacted ADM's Agricultural Services and Oilseeds (AS&O) division—its largest business segment—which reported a 40% drop in operating profit last year. Additionally, the company is contending with increased trade tensions between the United States and China, two nations crucial to ADM's global supply chain. The U.S., a leading exporter of agricultural products, and China, its top buyer, form a vital trade axis for ADM's operations.

The job cuts, according to media reports, are expected to affect between 40 and 50 employees, leaving only around 10 staff members at the Shanghai office. While ADM has not officially disclosed the exact number of layoffs, media outlets have reported that the entire Ag Services and Oilseeds team in China has essentially been disbanded.

The restructuring effort is part of ADM’s broader plan to slash costs by $500 to $700 million over the next three to five years. The company initiated layoffs earlier in February as part of this cost-saving strategy. ADM’s decision to cut jobs and end domestic trade operations in China also follows a broader internal crisis, as it has been entangled in an accounting scandal since last year. These challenges have culminated in the company posting its lowest fourth-quarter profit in six years, further underscoring the urgency of its ongoing restructuring plans.

Media reports suggest ADM is aiming to streamline its operations globally in response to mounting financial pressures, positioning itself for greater agility in an increasingly volatile economic landscape.

ChemAnalyst reached out to ADM for comments, but the company has not issued a statement.