Arla Foods, one of the world's largest dairy companies, has announced that it will make roughly 350 jobs redundant in a restructuring move meant to 'streamline' corporate operations and support functions, as well as optimise Cheddar cheese production.
Earlier in 2017, the company launched an 'internal transformation programme' dubbed Calcium, a three-year programme that is expected to deliver €400 million in savings and resource efficiencies by the end of 2020, making the company more competitive.
Under Calcium, the focus will be shifted to the front line of the business, where it interacts with customers and consumers.
The initiative is also meant to improve returns, keep a competitive milk price, and increase growth.
The CEO of Arla Foods, Peter Tuborgh, commented, "It is never easy to say goodbye to valued colleagues, especially in these circumstances, and I would like to thank those people who are leaving us for the contribution they have made to Arla Foods, and I wish them well for the future. We will provide our full support to those colleagues affected during this process."
Increasing Efficiencies
Global departments such as finance, legal, IT, corporate strategy, member relations, HR and corporate affairs will be most affected by the cuts to corporate operations and support staff, with 195 redundancies expected. Most role redundancies will take place at the group's headquarters, in Aarhus, Denmark, with other administrative offices across Europe affected to a lesser extent.
Changes to its Cheddar cheese production operations may also cause 154 roles to become redundant by the end of the year.
The group announced that it would be ceasing production at its Llandyrnog creamery, moving Cheddar cheese volumes to its Lockerbie and Taw Valley creameries. This move is meant to optimise Cheddar cheese production and improve efficiencies by consolidating production and packaging operations, which have not previously been used to their full capacity, the company said.
Arla Foods is also planning to integrate its Cheddar cheese packaging lines into its Oswestry packing facility, which will result in the closure of the smaller Malpas and Lockerbie packaging operations.
'Front-Line Obsessed'
Arla Foods' plan is to create a 'front-line-obsessed' company, with the Calcium programme transforming activities across production, product creation, procurement, promotional marketing, and staff management.
The company said that such an initiative was necessary due to two unique external challenges: its exposure to the weak British pound, and 'unfavourable developments' in commodity markets.
Tuborgh commented on the changes, saying, "We want to achieve the goal of building a stronger, more competitive Arla, which serves our customers and consumers better and provides higher returns to our farmer owners, and that requires us to make tough decisions.
"In order for Arla to continue to deliver on our Good Growth 2020 strategy that brings innovative dairy products to millions of consumers around the world, we must become one of the most agile and front-line-obsessed companies in today’s fast-paced and complex global food industry," he added.
Arla’s board of directors appointed the Danish-born Jan Toft Nørgaard to the position of chairman recently, following former chairman Åke Hantoft’s decision to step down upon the completion of the sale of his dairy farm in Ösarp, Sweden.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: European Supermarket Magazine.
