French firm Danone to cut up to 2,000 jobs as Covid-19 drives renewal

French firm Danone to cut up to 2,000 jobs as Covid-19 drives renewal

LONDON • Danone will cut up to 2,000 jobs, including one in four at its global headquarters, as the world's largest yogurt maker tries to reactivate profitability amid the coronavirus pandemic.

French firm Danone to cut up to 2,000 jobs as Covid-19 drives renewal


Danone has global headquarters around the world in locations such as Amsterdam and Singapore. In France, between 400 and 500 jobs will be cut, a spokesman said.


Job cuts represent around 2 percent of Danone's total staff.


Yogurt maker Danone and Activia and Evian water also said yesterday that it is considering moving the global headquarters of its various lines of business closer to the base of its French operations in Paris. Annual cost savings should reach € 1 billion (S $ 1.59 billion) by 2023, also driven by more efficient purchasing.


CEO Emmanuel Faber is changing the organization to focus on geographic zones rather than product categories to be more agile amid the pandemic. Competitors like Nestlé have long followed a regional strategy.


"This year has shown that our companies could be significantly affected in their competitiveness by external impacts in the countries where we operate," Faber said in a press call. "In this volatile world for the next few years, we need to create a margin of safety."


The company also plans to reduce the range of products it sells by 10 to 30 percent next year, focusing on faster-growing and more profitable products.


The total one-time costs related to the changes will be approximately € 1.4 billion for the period 2021-2023.


Danone also said its adjusted operating margin should exceed 15 percent in 2022 and reach medium to high teen levels later on, which would be a record high.


Danone shares have plunged 29 percent this year.


BLOOMBERG, REUTERS

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