Fonterra slashes workforce by more than 500 'to remain strongly competitive'
Fonterra announced earlier today it cutting 523 jobs following a consultation involving employees across procurement, finance, information services, HR, strategy and legal.
In a statement, it said roles will be "disestablished" at a cost of between NZ$12m (US$7.8m, €7.2m) and NZ$15m (US$9.8m, €9m).
It expects payroll savings of between NZ$55m (US£35.9m, €33m) and NZ$60m (US$39.1m, €36m) per year as a result.
Those affected by the decision will begin leaving Fonterra in September, it said.
While "unsettling" for those affected, the cuts are essential if Fonterra is "to remain strongly competitive in today's global dairy market," said Theo Spierings, CEO, Fonterra.
"Reducing the number of roles in our business isn't about individual competency; it is about continually improving the way we deliver performance," he said.
Fonterra has also informed staff it will begin a second consultation on August 1, which will involve employees across administration, ingredient sales, consumer marketing, R&D, communications, health and safety, food safety and quality, group resilience and risk, property, procurement and change management.
Today's announcement is the first result of a business review launched by the New Zealand dairy giant in March.
"The key aims of the review are to ensure that the Co-operative is best placed to successfully deliver its strategy, increase focus on generating cash flow, and implement specific, sustainable measures for enhancing efficiency," said Spierings.
"A simple example already identified by our supply chain team is a logistics solution that increases the utilisation of export containers leaving our distribution centres, saving up to $5m a year," he said.