Pressure Mounting On Pilgrim's Pride

Pilgrim's Pride, the largest chicken producer in the US, has announced it is to cut some 335 jobs from its US operations in a desperate bid to reduce costs.

It is understood the lay-offs will take place by the end of the month. Employees affected will be notified within the next week. Pilgrim’s Pride said the job cuts come because of the toughest operating environments in decades.

The company’s share price has plummeted from a high earlier this year of US$29.55 to just 33 cents yesterday.

Analysts Fitch Ratings said yesterday that Pilgrim’s bonds were trading as though the market was expecting bankruptcy. Pilgrim’s failed to make a US$25 million interest payment on 3 November and is exercising a 30-day grace period to meet the debt, they say.

After a disastrous year coping with the volatility in the grains markets, the company was put under further pressure last week following the announcement by arch rivals Tyson Foods that it would not cut its poultry output despite the sector posting huge losses.