Tyson to close offices in South Dakota, Chicago and relocate 1,000 workers

Dive Brief:

• Tyson Foods announced it will close corporate offices in Chicago and Downers Grove in Illinois and Dakota Dunes, South Dakota early next year. No layoffs will occur, and an estimated 1,000 employees will be given the chance to relocate to the company’s Arkansas headquarters, the company told Food Dive.
• The meat and poultry giant’s president and CEO Donnie King said bringing the corporate team members together will allow the company to “act quickly to solve problems and provide the innovative products solutions.” Tyson also announced plans to expand its world headquarters “to foster collaboration, connection and creativity.” 
• Similar to other CPG companies, Tyson continues to face operational challenges and moving its corporate employees under one roof should allow it to cut costs and reorganize under one location.

Dive Insight:

Tyson’s aim to consolidate its corporate workforce comes amid a challenging period for the company dealing with softening consumer demand, higher costs, declining sales volumes and executive turnover.

Earlier this year, Tyson said it was implementing aggressive strategies, such as automation and worker retention programs, to meet the demand for its chicken.

In its most recent quarterly earnings call, Tyson CEO Donnie King said the company’s strategy to retain workers has helped in its meatpacking plants, furthering its effort to increase productivity. 

“Investment in team members are making an impact as higher pay and enhanced benefit offerings have led to lower turnover and absenteeism in our plants, which positions Tyson for future growth,” King said.

In the closure of offices in Illinois and South Dakota, Tyson said it will offer relocation assistance and severance to employees who choose not to relocate to Arkansas.

It remains to be seen whether Tyson’s relocation of some of its corporate employees can contribute to the growth and creativity the company desires. Tyson, which produces about 20% of the beef, pork and chicken in the United States, according to the company, has an estimated 137,000 employees.

Tyson’s corporate structure has attracted some scrutiny recently following recent changes in the C-suite.

Last week, the company was criticized by Stanford corporate governance professor Joseph Grundfest after it appointed John R. Tyson, the son of board chairman John H. Tyson, as its new CFO.

Grundfest said it could create a conflict of interest, as the new CFO may not be terminated if he does not fulfill the job competently. The younger Tyson, 32, has minimal experience in executive financial leadership positions compared to his predecessor, Stewart Glendinning. As part of the turnover, the company also said Glendinning would take on the position of group president for Tyson’s prepared foods.

Since taking over as CEO in 2021, King has not only increased Tyson’s dependence on automation and employee programs to meet demand but it has invested more than $400 million dollars to expand beef, chicken and prepared foods facilities in three states.