Eroding share of milk worries Fonterra shareholders
Fonterra shareholders are concerned with a further decline in the co-op’s share of milk collected in New Zealand.
The co-op has had a hiring freeze since February, so about 50 roles potentially affected by the review of its support services in New Zealand are already vacant. Fonterra employs 17000 people globally.
Consultation is starting with employees on the proposed changes which chief executive Theo Spierings says are designed to enable Fonterra to deliver its growth strategy.
"While we are investing in growth, we have to make sure our people are working on the right things and that we are spending our precious capital on the right priorities," says Spierings.
"The review has identified potential opportunities for us to deliver a range of corporate services centrally, reducing duplication and removing layers of management."
Spierings says the proposed changes, which will potentially lead to the loss of 300 positions, will be applied only to positions in Fonterra's corporate offices in New Zealand.
If implemented, the changes would provide on-going savings of $65 million a year, before restructuring costs. Most of these savings would be reinvested to support Fonterra's growth priorities. These savings would be additional to the $60 million in cost savings Fonterra has already committed to deliver this year.
