Monsanto to cut workforce by 12%

Monsanto, the world’s biggest seed company, plans to eliminate 12 percent of its workforce to reduce expenses as it forecasts fiscal 2016 earnings that trailed analysts’ expectations amid weaker commodity markets.

Profit will fall to $5.10 to $5.60 a share in the 12 months that began Sept. 1, excluding restructuring costs, from $5.73 a year earlier, St. Louis-based Monsanto said Wednesday in a statement. That compares with $6.22, the average of 23 estimates compiled by Bloomberg News. The shares dropped in premarket trading in New York.

Monsanto plans to eliminate 2,600 jobs as it reprioritizes some research and development efforts, including exiting the sugar-cane business, to save as much as $300 million a year. Like most of its competitors, Monsanto is struggling to increase earnings amid two straight years of depressed commodity prices that have reduced farmer incomes. Still, the company said it plans to meet its goal of doubling per-share earnings in five years from 2014.

— Bloomberg News

U.S. agency targets arbitration clauses

Under a proposed U.S. regulation that will probably draw ire from Wall Street, banks and credit card companies would not be allowed to force customers to sign away their legal rights to take part in class-action lawsuits.

Monsanto workers in a research facility in Chesterfield, Mo. Monsanto plans to eliminate 2,600 jobs as it reprioritizes research and development efforts (Tom Gannam/Reuters)

The Consumer Financial Protection Bureau said Wednesday the proposal marked the first step in the process of potentially drafting regulations to ban certain “free pass” arbitration clauses, often buried in fine print, that consumers must sign when opening financial accounts.

Banks, credit card companies and broker dealers typically use such clauses to shield themselves from lawsuits and lower their legal costs. Signers cannot file claims in federal courts and must resolve disputes individually through privately appointed arbitrators.

“The essence of the proposals we have under consideration is that they would get rid of this free pass that prevents consumers from holding their financial providers directly accountable for the harm they cause when they violate the law,” CFPB Director Richard Cordray said in a prepared statement for a hearing in Denver.

Wall Street banks have opposed any efforts to chip away at arbitration clauses, long targeted by consumer advocacy groups, which say they curb legal rights.

The 2010 Dodd-Frank Wall Street reform law gave the CFPB and the Securities and Exchange Commission the power to restrict or ban arbitration clauses.

The CFPB on Wednesday published an outline of proposals it will consider. Not all arbitration clauses would be banned. Individual disputes, for instance, could still be resolved through arbitration. But it would prohibit companies from using such clauses to block class-action lawsuits. Companies that choose to use arbitration clauses for individual cases would have to submit information to the CFPB concerning any claims filed and awards issued.

— Reuters

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