Arla Foods to cut 500 jobs in global reorganisation
9 Feb 2016
Arla Foods, one of the largest dairy groups in Europe, has announced plans to cut 500 jobs as part of a global restructuring of its business.
The dairy company, which owns the world’s largest fresh milk facility in Buckinghamshire, manufactures dairy products under brands such as Anchor, Cravendale, and Lactofree.
The company recently announced plans to unify its eight global dairy categories and operations in six regions into a single company, in what it describes as a “dramatically changing” global dairy market.
More milk is being produced globally, Europe is experiencing pressure on prices and very little growth, which means competition is fierce.
Arla Foods CEO Peder Tuborgh
As a result, Arla said it would cut 500 jobs across its markets, with details of these to be confirmed by mid-March.
“Arla has grown its business significantly in recent years both organically and through mergers,” said Peder Tuborgh, chief executive of Arla Foods. “However, more milk is being produced globally, Europe is experiencing pressure on prices and very little growth, which means competition is fierce.
“In addition, consumer needs are becoming more diverse and our customers expect increasing levels of service. Therefore, we need to be more agile and cost efficient to remain competitive. In order to remain at the very top of their preferred partners list it will be necessary to change the ways we work.”
The company said the reorganisation would also see the creation of a new global executive management team charged with increasing the organic revenue growth rate from the 2% delivered over the past few years to at least 4% by 2020.
The announcement closely followed news that Arla Foods had lost a share of its contract to supply fresh milk to Tesco, after the UK retailer signed a new supply deal with Muller.
Ready-meals supplier Bakkavor is also reported to be in consultation with a number of staff, with 300 jobs potentially under threat, after the company lost a £32m contract to supply mashed potato to Tesco.
General Mills also recently confirmed 265 jobs would be cut in the UK following the closure of its pastry factory in Northumberland, which makes Jus-Rol pastry and Betty Crocker cake mixes.
