Fonterra is axing 523 jobs as part of a “business review” the dairy co-operative says will save $55 million to $60 million a year.
The affected staff will start leaving in September, while Fonterra will begin consultation on new business structures with its people in administration roles, sales, consumer, marketing, research and development, communications, health and safety, food safety and quality, group resilience and risk, property, procurement and change management in August.
The staff cuts will come at a one-off cost of $12 million to $15 million, Fonterra says. Fonterra has more than 18,500 global staff.
Chief executive Theo Spierings says the news had been unsettling for the people affected but the co-operative had to change if it was to remain competitive in today’s global dairy market.
“Reducing the number of roles in our business isn’t about individual competency; it is about continually improving the way we deliver performance”, he says.
The cuts have been announced as Fonterra’s updated its previously outlined business review.
Spierings says, “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.
“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 $5 million a year.”
The review includes measures to improve profitability at Fonterra’s Australian business as well as a series of additional measures to remove barriers across the organisation to enable it to unlock more value.