1,800 jobs face axe as dairy co-op FrieslandCampina cuts costs

The move is part of a plan to save €400-500m a year as the co-op looks to improve its competitiveness and business sustainability

Dutch dairy co-op FrieslandCampina has announced plans to lower costs by cutting over 1,800 jobs worldwide over the next two years.

The cuts – which will see around 1,200 jobs go in 2024 – will affect roles in nearly every part of the organisation. Half of the lay-offs will be for for workers in the Netherlands, and the rest will be abroad.

They follow the loss of 1,000 jobs in 2020, when the business blamed the impact of coronavirus and pressure on profit margins in the Netherlands, Belgium and Germany.

“Today is a tough day for FrieslandCampina,” said Jan Derck van Karnebeek, CEO of Royal FrieslandCampina NV, announcing the latest cuts. “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.”

One of the world’s largest dairy co-ops, FrieslandCampina sells its milk, cheese and baby formula and ingredients for the food and pharmaceutical industries in more than 100 countries. It employs around 22,000 people in 30 countries, and had a turnover of €14bn in 2022.

The co-op previously announced plans to achieve annual gross cost savings of €400- 500m from 2026 onwards; the job reductions will account for €180-200m of this total.

The savings are part of Expedition 2030, a “sharpened strategy aimed at strengthening FrieslandCampina’s position as a leading, innovative and sustainable player in the dairy industry”.

Part of the annual savings will be needed to off-set inflation, the co-op adds, and 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 €170m will be booked in 2023.

All proposed decisions are subject to Central Works Council advice and local laws and regulations, the co-op added.

The news follows “disappointing” financial results in 2023 and the co-op said no supplementary cash payment will be made to member dairy farmers over 2023.

Other dairy co-ops have recently announced job cuts: Ireland’s Lakeland Dairies is to shed 78 roles as it closes three processing plants, and Norway’s Tine is axing 100 jobs in a restructure.