Newmont’s Strategic Overhaul Delivers Record Profits Amid Workforce Reductions

The world's largest gold producer has concluded one of the most substantial corporate transformations in mining industry history, achieving unprecedented profitability while eliminating thousands of positions. This dramatic restructuring raises important questions about the sustainability of such aggressive cost-cutting measures and their implications for the company's future performance.

Despite the organizational upheaval, Newmont's financial performance has reached new heights. The company reported third-quarter free cash flow of $1.6 billion, marking the fourth consecutive quarter exceeding the billion-dollar threshold. Net earnings reached $1.8 billion, while adjusted EBITDA stood at an impressive $3.3 billion.

Production volumes remained robust with 1.4 million ounces of gold and 35,000 tons of copper extracted. The company realized an average gold price of $3,539 per ounce, providing significant profitability enhancement during a period of strengthening precious metal prices.

Workforce Reduction Impacts Management Structure

Newmont's completion of its internal restructuring initiative, dubbed "Project Catalyst," has resulted in substantial workforce reductions. Approximately 16% of employees were eliminated throughout the organization, with middle management experiencing particularly significant cuts.

Roughly 12% of positions classified as "Level of Work 2" - encompassing supervisors and specialists - were removed, along with approximately 10% of entry-level roles. These measures reflect management's determination to create a leaner, more efficient operational structure, though questions remain about potential long-term consequences.

Portfolio Streamlining Generates Billions

Concurrent with internal restructuring, Newmont has aggressively streamlined its asset portfolio. The company has announced transactions expected to generate net proceeds exceeding $3.5 billion in 2025, including approximately $2.6 billion from divested assets.

Should investors sell immediately? Or is it worth buying Newmont Mining?

A recent example includes the disposal of the Coffee project to Fuerte Mining for up to $150 million. The transaction includes $10 million in cash, $40 million in shares, plus 3.0% royalty payments on smelter returns. This strategic focus on core mining operations while shedding non-essential assets has simultaneously increased liquidity and reduced organizational complexity.

Leadership Transition and Cost Management

CEO Tom Palmer will step down at year's end, with Natascha Viljoen slated to become the first female chief executive in the gold mining giant's history. This leadership transition occurs as the company has substantially revised its cost projections downward.

Administrative expenses are expected to decrease by $85 million, while exploration and project expenditures will be reduced by $75 million. The production forecast for 2025 remains unchanged, with 2026 projections anticipating a shift toward more cost-effective production from the new Ahafo North mine.

Analyst Sentiment Turns Bullish

Market experts have responded positively to Newmont's transformation. Goldman Sachs upgraded the company from Neutral to Buy while raising its price target from $77.30 to $104.30. CIBC assigned an Outperformer rating with a $112 target, and RBC Capital Markets issued an Outperform rating with a $95 target.

The consensus fair value estimate currently stands at $103.42 per share, significantly above current trading levels. This improved outlook stems from two primary factors: sustained gold prices above $4,000 per ounce and operational efficiency gains resulting from the corporate restructuring.