FrieslandCampina to cut 1,000 jobs by end 2021
Dairy producer FrieslandCampina will cut approximately a thousand jobs by the end of next year. Most of the job losses will happen in the Netherlands, Belgium and Germany. The company has to cut costs due to the coronavirus pandemic, FrieslandCampina said in a statement on Tuesday.
While the majority of FrieslandCampina's operating companies managed to increase their revenues so far this year, the company is still "weathering a perfect storm in 2020", CEO Hein Schumacher said. "Setbacks directly or indirectly caused by the coronavirus pandemic have significant financial impact on our profitability in 2020 and cannot be fully offset," Schumacher said. "Furthermore, profit margins in the Netherlands, Belgium and Germany remain under pressure."
According to Schumacher, the coronavirus crisis resulted in the border between Hong Kong and China still being closed, lower bulk dairy prices, and a fall in food service revenues worldwide. And all this put pressure on the FrieslandCampina results.
The company will therefore accelerate its plans to optimize the organization in order to reduce costs. This includes cutting around a thousand jobs, mainly in the Netherlands, Belgium, and Germany. The company will do this through natural staff turnover, redeployment and refraining from filling vacancies, as much as possible. But forced redundancies cannot be ruled out.
"We are fully aware that this will entail tough decisions which will have an impact on our people. Nevertheless, these interventions are necessary to enable us to operate successfully as a business and to continue to pay our member dairy farmers an exemplary milk price in the future," Schumacher said.
FrieslandCampina expects that restructuring costs will amount to between 150 million and 175 million euros, which will be largely charged to the 2020 profit. But from 2022 onward, the company expects its cost cutting will result in savings of over 100 million euros per year. To contribute to cost savings, there will be no 2020 long-term bonus for senior management.