By Ralph Tathagata

FrieslandCampina says it’s lowering costs by reducing over 1,800 jobs worldwide over the next two years, starting with about 1, 200 jobs in 2024. The job cut will affect almost all parts of the organisation.

Announcing the development today, Jan Derck van Karnebeek, CEO of Royal FrieslandCampina N.V., said, “Today is a tough day for FrieslandCampina. Over the past period, we have analysed the cost structure of our organisation and we are now announcing difficult but necessary steps to structurally reduce our costs.

“We realise that the announcement of job losses will have a big impact on the people involved. We will therefore do our utmost to inform and assist everyone as best as possible 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.”

It would be recalled that FrieslandCampina previously announced that it aims to achieve annual gross cost savings of 400 to 500 million euros from 2026 onwards of which 180 to 200 million euros can be attributed to the job reductions announced today. According to the diary giant, the cost savings are part of Expedition 2030, the sharpened strategy aimed at strengthening FrieslandCampina’s position as a leading, innovative and sustainable player in the dairy industry.

“A part of the annual savings will be needed to off-set inflation. The remaining margin expansion will be equally divided between investing in sustainable growth and increasing the company’s net profit. To realise the savings, one-off costs of up to 170 million euros will be booked in 2023.

“All proposed decisions are subject to Central Works Council advice and local laws and regulations.

Due to the disappointing financial results in 2023 and aforementioned one-off costs, no supplementary cash payment will be made to member dairy farmers over 2023,” the statement added.