Monsanto Will Cut Up to 2,500 Jobs, Sell Some Units

Monsanto Co. said Wednesday it plans to eliminate as many as 2,500 jobs and sell some nonessential businesses as part of a wide-ranging effort to reduce costs and raise $5 billion to fund key acquisitions and new products.

The announcement comes less than a month after the agricultural and pharmaceutical products company called off a $33.6-billion merger with American Home Products Corp. and posted a loss of $100 million for the third quarter.

Monsanto, based in St. Louis, said it will raise $4 billion through stock and bond sales. It expects to raise an additional $1 billion by selling off some non-core businesses.

The company said it expects to eliminate between 700 and 1,000 jobs, some at the executive level, by the beginning of 1999. An additional 1,300 to 1,500 job reductions will come from businesses it will sell. The company has 28,000 employees worldwide.

“It’s a path we’ve chosen to assure financial flexibility,” said spokesman Jeff Bergau.

Monsanto’s announcement came after the market closed Wednesday. Its shares finished down 50 cents at $38.69 on the New York Stock Exchange.

The moves, combined with other actions, are expected to reduce administrative costs by 20% next year and will result in a $400-million to $600-million charge in the fourth quarter, Monsanto said.

Analysts said the move was not unexpected, especially after the merger deal with AHP of Madison, N.J., fell through.

Monsanto was counting on the deal to help bankroll new acquisitions and fund the development and marketing of new products. It now is forced to raise that money on its own.