Dairy exporting giant Fonterra has cut 750 jobs so far as part of a major review to trim costs and remain competitive on the world stage.
The Auckland-based company has issued an update on its business review in which chief executive Theo Spierings confirmed the job losses to date and warned there was more “fine-tuning” to come.
“We have great people, but we have to make tough decisions to ensure Fonterra remains competitive in this environment,” he said.
“We will continue to fine-tune our organisation to ensure we best support the initiatives identified by our business review.”
The company cut 523 jobs in July and has since cut a further 227 positions.
A spokesman told BusinessDesk that the jobs cuts would result in a one-off cost of $NZ33 million ($29.42 million) and generate direct annual savings of $NZ103 million a year.
Fonterra employs 18,000 staff globally and 11,500 in New Zealand.
The review, undertaken by an internal management team and business management consultancy McKinsey & Co, was started in December when it became clear the global dairy market wasn’t recovering as quickly as hoped.
The company indicated in June that hundreds of staff would be laid off across Fonterra’s global operations as funds were redirected into sales and marketing roles to drive up returns.
In the latest update, Mr Spierings reiterated the review was needed to ensure that Fonterra remains well-positioned to compete in a rapidly changing global dairy market.
One-off savings generated by these changes have already enabled the dairy co-operative to support farmers during challenging market conditions, he said.
“Our business is looking to the future with the momentum, energy and solid plans needed to keep improving performance.”
Fonterra in August slashed its farmgate milk price for the coming season by $NZ1.40 to $NZ3.85 per kilogram of milk solids but since then prices have risen at three successive GlobalDairyTrade auctions to arrest a six-month slide.
Prices remain 43 per cent lower than at the same time last year.
The company releases its annual results on Thursday.
Source: Sydney Morning Herald
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