Tyson Has a Problem: Too Many Chickens 

It is possible to have too much of a good thing. Just ask Tyson Foods.

The Springdale, Arkansas-based company, which supplies one-fifth of the country's chickens, saw demand for its poultry products soar when Covid-19 restrictions were lifted and diners returned to restaurants amid a falloff in cases. The company aggressively ramped up production.

Not anymore. Even as Covid cases continue to drop -- they're down in 2023 by more than 31% compared to a year ago -- Tyson's estimates of demand proved to be far too optimistic and the company has been scrambling to cut costs, according to The Wall Street Journal.

In August, Tyson reported a net loss of $435 million for the quarter ending July 1, down steeply from a net profit income of $753 million in the same period a year earlier, according to the company’s third quarter earnings report.

The company also said it would shut down four chicken plants in addition to the closures of two others it announced in May, moves that will result in over 4,600 layoffs, according to NBC News. Tyson had eliminated 10% of corporate jobs and 15% of leadership roles in April, Reuters reported.

It also said it would shift some of its production to more up-to-date plants, saying that it would cost too much to modernize some existing plants. “The industry sometimes overshoots,” Paul Aho, a poultry-industry consultant told The Wall Street Journal.

Tyson first made moves to right itself in January, when the company announced it was replacing David Bray, who had served as president of Tyson's poultry business since 2021, with Wes Morris, a former Tyson executive who had retired from the company in 2017, according the company's announcement of his appointment.

But the company isn't predicting a quick turnaround. "Market conditions in chicken are still challenged with commodity prices across most cuts remaining significantly lower, compared to last year" said Tyson Chief Executive Officer Donnie King in a call with investors August 7.