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ADM has initiated the closure of its domestic trading operations in China, resulting in significant layoffs within its two largest business segment, Ag Services and Oilseeds. As reported by Reuters, this move is part of a broader global cost-reduction initiative, aimed at enhancing the company's agility in a challenging market environment.

While ADM has not publicly disclosed the exact number of layoffs, sources indicate that between 40 to 50 employees will be affected, leaving a mere 10 staff members in the financial hub of Shanghai. "The entire Ag Services and Oilseeds team in China has essentially been let go," a source familiar with the situation revealed to Reuters.

The decision to halt domestic trading operations at Toepfer Shanghai is expected to conclude by the end of September. ADM has clarified that its other operations in Shanghai will remain unaffected.

This restructuring comes as ADM grapples with declining profits driven by several factors, including lower crop prices, inflation-induced reductions in consumer demand and weak processing margins. The company's operating profit in its Ag Services and Oilseeds division plummeted by 40% last year, reflecting the broader challenges faced by the sector.

Additionally, rising trade tensions between the US and China have introduced further complexities for ADM, which relies heavily on the flow of agricultural goods between the two nations. The US is the largest exporter of farm goods, while China stands as the top importer, making the dynamics of this relationship crucial for ADM's operations.

In February, ADM began implementing layoffs as part of its plan to achieve cost savings of $500 million to $700 million over the next three to five years. The company reported its weakest fourth-quarter adjusted profit in six years, underscoring the urgency of its restructuring efforts.

Despite these challenges, ADM's shares saw a modest increase of 1.3% on Monday, closing at $46.43, following a recent decline to their lowest level in nearly five years.