Co-operatively owned meat processor Danish Crown has announced 150 job cuts at its business unit as part of a ‘new roadmap’.
Danish Crown, which is owned by 9,000 Danish cattle farmers via the co-op Leverandørselskabet Danish Crown Amba, released a statement last month with details of the restructuring.
It cites Covid-19, war in Ukraine and growth in China’s domestic pig production as factors that have led to lower exports and “reluctant customers”.
Danish Crown now aims to cut DKK 400m (GBP 47.8m) per year through a process of restructuring that is expected to take around six months.
“These are drastic changes which have happened in a very short space of time,’ said says Jais Valeur, group CEO at Danish Crown.
“We can’t influence market trends, but we can do something about our own business. We based our strategy on a stable and strong market and a positive outlook. Now, everything has been turned upside down, and we’ve had to rethink the way in which we can achieve our goals.”
The cost-cutting plans include merging or shutting down sales companies outside Denmark and reducing the capacity of its factories and slaughterhouses around Europe.
Up to 40% less cattle will be slaughtered by Danish Crown between now and May, with future capacity beyond that date yet to be determined.
The news comes after the recent announcement that Danish Crown is closing its deboning site in Boizenburg, east of Hamburg, Germany. Production director Per Laursen said that the site’s 200 employee would be offered jobs at one of their other facilities “to the extent that it is possible”.
Danish Crown also plans to cut 150 jobs, 100 of which are expected to be in Denmark – primarily in the business unit Danish Crown, which was created through the merger of Danish Crown Pork and Danish Crown Foods.
“It’s very sad having to say goodbye to so many skilled employees,” said Valeur, “but we really have no other choice in the current situation. Costs, efficiency and a tight supply chain all the way from the farmer to the consumer are central to the current market situation.
“This is why I would also like to stress that it is not because individual employees have not lived up to their responsibilities, but because of the extraordinary situation that we’re faced with and which, unfortunately, requires a rightsizing of the organisation.”
Danish Crown says it has informed employees of the anticipated redundancies and is establishing a negotiating committee comprising management and employee representatives to discuss terms for those concerned.