Fonterra plans to shed 300 staff, save $65m
Dairy giant wants to remove "layers of management" at its New Zealand corporate offices.
Fonterra wants to cut up to 300 corporate jobs and save about $65 million a year.
If those savings relate directly to salaries, that averages $216,000 a year per job lost.
Later today Fonterra says the $65 million is not all made up of salaries and says it will provide a breakdown showing other cost savings.
Almost 4000 of Fonterra's 17,000 employees earned more than $100,000 in the last financial year, its 2012 annual report showed.
In a statement today, Fonterra chief executive Theo Spierings says the dairy giant is consulting staff over a plan to deliver a range of corporate services at its New Zealand offices centrally, "reducing duplication and removing layers of management”.
The May Day announcement marks the biggest layoff at the dairy giant since it cut workers in 2006 with the closure of manufacturing plants.
By 1pm, units in the Fonterra Shareholders Fund (NZX: FSF) had risen rose 2.7 percent to a record $8.02.
Fifty of the 300 Fonterra roles are currently vacant, caught in a staff freeze imposed in February.
If implemented, the proposed changes would provide ongoing savings of $65 million a year, before restructuring costs, the company says.
Fonterra's statement says most of the savings would be reinvested to support Fonterra’s growth strategy – mainly targeting emerging markets – and the $65 million is on top of the $60 million in savings Fonterra has promised to deliver this year.
Last week Fonterra announced a shakeup of its Asia Pacific/Middle East/Africa (APMEA) unit with the departure of managing director Mark Wilson.
In March, Fonterra posted a 32 percent gain in first-half profit to $449 million and lifted its forecast payout to farmers to $5.80 per kilogram of milk solids from an earlier forecast of $5.50.
At the same time, it flagged plans to slash the number of consumer brands in Australia in the face of intense competition for milk supply and retail sales. Earnings at the ANZ unit fell 32 percent.
- additional reporting by BusinessDesk
NBR Online staff
Wed, 01 May 2013
Wed, 01 May 2013
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Fonterra plans to shed 300 staff, save $65m
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