Newmont Corporation (NYSE:NEM), the world's largest gold mining company, has initiated senior employee layoffs as part of a broader restructuring strategy.
The company will dismiss at least ten senior managers and one executive, aligning its cost-cutting with an effort to focus on Tier 1 operations.
"A big part of our commitment is to deliver $100 million of free cash flow by bringing Newmont and Newcrest together…there is a reduction in headcount in order to achieve those synergies," CEO Tom Palmer stated, explaining the plan earlier this year.
Despite these efforts, the company continues to grapple with higher-than-expected costs at mines in Australia, Canada, and Papua New Guinea. People familiar with the matter spoke to Bloomberg about the layoffs, stating that Palmer faced criticism from major investors after a disappointing earnings report in October.
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The major restructuring follows a $15 billion acquisition of Newcrest Mining in 2023, which expanded its workforce from 14,000 to nearly 22,000 employees.
While the acquisition brought in much-needed mineral reserves, the increase in headcount also impacted costs across the board, not only in top-tier jurisdictions that generally have high labor costs.
Along with the layoffs, the company plans to merge several business units to streamline reporting structures. Five divisions will be consolidated into three, eliminating standalone units overseeing operations in Australia and Africa and integrating them with North America and East Asia divisions.
As part of its effort to focus on Tier 1 assets, Newmont has sold smaller operations, including mines in Australia, Canada, and Ghana. The divestitures, including the Tanami and Kalgoorlie mines, have collectively raised $3.8 billion, helping the company strengthen its balance sheet while prioritizing high-margin projects.
While Newmont's management works on streamlining its portfolio and focusing on world-class operations, the market has yet to recognize its efforts.
Gold has been one of the best-performing asset classes, rising around 34% year-to-date. Meanwhile, Newmont's stock has gained only 2%, trailing significantly behind its most coveted product.
Is Newmont A Good Stock To Buy?
An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Newmont‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.
These are known as capital allocation programs. Newmont does pay a dividend, which yields 2.35% per year as of the closing price on Dec. 10, 2024. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.
For example, if you're looking to earn an annualized return of 11.78%, you'll need to buy a share of Monroe Cap by the Dec. 16, 2024. Once done, you can expect to receive a nominal payout of $0.25 on Dec. 30, 2024.
Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Newmont will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.
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