FrieslandCampina announces massive layoffs to cut costs

World 13.12.2023

Source: The DairyNews

Dutch dairy cooperative FrieslandCampina has announced its intentions to “cut costs” by cutting more than 1,800 jobs worldwide over the next two years. The company confirms that almost all divisions of the organization will suffer: about 1,200 jobs will be lost in 2024, The DairyNews reports with reference to foodingredientsfirst.com.

FrieslandCampina announces massive layoffs to cut costs — FrieslandCampina

“Today is a difficult day for FrieslandCampina. Over the past period, we have analyzed the cost structure of our organization and are now announcing complex but necessary steps to structurally reduce our costs,” said Jan Derk van Carnebeek, CEO of Royal FrieslandCampina. “The announcement of job cuts will have a big impact on the people involved. Therefore, we will do our best to inform and assist everyone as best we can during this difficult time. These cost savings should contribute to FrieslandCampina’s ability to compete and win in the market for the benefit of our employees and member dairy farmers.”

FrieslandCampina wants to achieve annual gross cost savings of between €400 ($431.8 million) and €500 million ($539.8 million) from 2026. Between €180 million and €200 million ($194.3 million) ($215.9 million) can be attributed to the job cuts announced today.

The cost savings are part of Expedition 2030, a clear strategy aimed at strengthening FrieslandCampina's position as an innovative and sustainable player in the dairy industry.

The company plans to split the remaining profits equally between investing in sustainable growth and increasing the company's net income. The remaining profit increase will be divided equally between investments in sustainable growth and increasing the company's bottom line.

To realize the savings, one-off costs of up to €170 million ($183.5 million) will be reserved in 2023.

FrieslandCampina also said that there will be no additional cash payments to member dairy farmers in 2023. Due to “disappointing financial results in 2023 and the above-mentioned one-time costs, no additional cash payments will be made to member dairy farmers in 2023.”