December 21, 2023

FrieslandCampina to cut down 1,800 jobs worldwide as part of cost reduction

FrieslandCampina intends to lower costs by reducing over 1,800 jobs worldwide over the next two years, of which around 1,200 jobs will be cut down in 2024.

These jobs are situated in most parts of the organisation, the Dutch dairy cooperative said on December 12.

Jan Derck van Karnebeek, chief executive officer of Royal FrieslandCampina NV, 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."

FrieslandCampina previously announced that it aims to achieve annual gross cost savings of  €400-500 million (US$438-547 million) from 2026 onwards of which €180-200 million (US$197-219 million) can be attributed to the job reductions announced on December 12. 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 (US$186 million) will be booked in 2023.

Due to the weak financial results in 2023 and the aforementioned one-off costs, no supplementary cash payment will be made to member dairy farmers over 2023, FrieslandCampina said.

- FrieslandCampina