Consultation over job cuts globally had started within the procurement, finance, information services, human resources, strategy and legal teams, the company says.
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Fonterra [NZX: FCG] has begun talks with finance, legal and information services staff as it looks to cut hundreds of jobs and cut costs.
Consultation over job cuts globally had started within the procurement, finance, information services, human resources, strategy and legal teams, the company says. "Other parts of the business will follow in the coming months."
Voluntary redundancies are in the mix and some teams have reportedly been told they could lose half their number, the Waikato Times reports, after the diary group met with more than 150 of its Hamilton staff. Staff have been warned against talking to the media.
Business management consultancy McKinsey & Co has been hired to help the review of Fonterra's global operations, part of a strategy chief executive Theo Spierings says is needed to ensure the cooperative "is best placed to respond to a rapidly changing global environment."
Mr Spierings says the review has identified potential areas where the company could "unlock increased value for its owners", including "significant initiatives in procurement, business operations and working capital."
"We have the right strategy and the long-term future of dairy is sound, however, the world is changing and global dairy markets are increasingly volatile," he says. "To keep ahead of the game, we need to be more agile, reduce costs and generate value."
Fonterra has faced criticism from shareholders over its underlying management performance, particularly as a falling farmgate price since the middle of last year puts farmers under pressure. Dairy prices sank to a new six-year low overnight, led by whole milk powder, the biggest product by volume Fonterra sells at auction. Whole milk powder sank 10.8% to $US2054 a tonne, reaching the lowest price since demand was sapped by the global financial crisis.
Fonterra Shareholders' Fund units, which are entitled to dividends from the company's ordinary shares, were last at $4.84 and have dropped 19% this year.
(BusinessDesk)
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