FrieslandCampina is cutting nearly a thousand jobs because of the coronavirus crisis. Employees in the Netherlands, Belgium and Germany are particularly affected.
Fear for the future
Dairy producer FrieslandCampina is facing severe cost cuts: due to the coronavirus crisis, turnover in the foodservice and hospitality industry has plummeted, while the closed border between Hong Kong and China is also causing export problems. In an earlier interview with RetailDetail, Belgian CEO Jeroen Van de Broek indeed confirmed that the out-of-home market had collapsed. He even fears "the hospitality sector will never return to what it used to be". The milk producer was planning to invest in cost savings over the next few years anyway, but is now accelerating and increasing its efforts.
Some thousand jobs are being cut, both in management and in production. Employees in the Netherlands, Belgium and Germany are particularly affected, as profit margins are under most pressure in these core markets. The company tries to avoid forced departures as much as possible, for example by not replacing employees and through transfers, but dismissals cannot be ruled out completely.
The perfect storm
CEO Hein Schumacher believes the dairy producer is facing a "perfect storm" and calls the interventions necessary, even to continue offering a reasonable price to its member dairy farmers. The reorganisation should have no impact on farmers: the volume of milk is supposed to remain the same. However, no long-term bonuses will be paid to senior management this year.
Operating result in 2020 will however be "negatively impacted" by the restructuring costs, Schumacher admits. The exact location of the redundancies has not yet been announced: FrieslandCampina has some 24,000 employees in 36 countries. In the Netherlands the company has almost 8,000 employees, in Belgium some 1,500 people are employed.