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Fonterra confirms job cuts proposal is underway

July 2, 2015
Consumer Packaged Goods
Fonterra has confirmed that massive jobs cuts are underway after a series of leaks about staff meetings across the country on Wednesday. 
 
It is understood that the co-operative held meetings with all finance delivery staff on Wednesday to announce proposed job cuts, and the beginning of a week-long consultation period. 
 
At the time, Fonterra refused several requests for comment, or the opportunity to respond to leaked information.
 
However, it put out a press release on Thursday confirming that, as part of a major, group-wide review, it had begun “consulting staff on proposals to streamline its business structures”.
 
The release, which quoted Fonterra chief executive Theo Spierings, said consultation is being “conducted globally starting with the co-operative’s procurement, finance, information services, human resources, strategy and legal functions.
 
“Other parts of the business will follow in the coming months.”
 
The release also said the review was aimed at making sure Fonterra is ready to respond to a rapidly changing global environment.
 
“The world is changing and global dairy markets are increasingly volatile. To keep ahead of the game, we need to be more agile, reduce costs and generate value,” it quoted Spierings as saying. 
 
It said the co-operative was now developing “defined plans that will drive further improvement across the business, allow Fonterra to fund its growth strategy and deliver stronger results”.
 
It also stated that the co-operative would provide an update on “impact to its business structures” once the consultation finished in late July. 
 
More than 100 Fonterra workers in Hamilton were called to a meeting at the Salvation Army Hall on Wednesday, which it is understood was one of many simultaneous meetings across the country.
 
Staff members who contacted Stuff said the meeting outlined a proposal which could see up to half of some teams cut, with one source saying “quite significant” losses could be in store for the city. However, the proposal also outlined a plan to bring jobs back to the city from Australia and Takanini in Auckland. 
 
Staff were given strict instructions on interaction with the media via internal email just prior to the meetings, including instructions to bring identity cards so they could be checked at the door, and who to pass reporters onto. 
 
One email sent by a manager said: “you will get better answers from me than you will from the Waikato Times so I strongly encourage you to avoid contact with the media through this process”. 
 
Fonterra announced last month that the whole company would undergo a sweeping review in an effort to generate more cash for farmers facing a $4.40 payout this year, after a record $8.40 payout last year. 
 
Spierings said at the time “hundreds” of jobs would go, with support services in the cross-hairs, while production and sales would see a boost. 
 
No information on how many new jobs may be created has been released. 
 
By Narelle Henson
 

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