Danone to cut its workforce for coronavirus pandemic

Danone will cut as many as 2,000 jobs, including one in four positions at its global headquarters, as the world’s largest yogurt maker attempts to revive profitability after getting hit by the coronavirus pandemic harder than other rivals, Bloomberg writes.

As reported, the job cuts represent about 2% of Danone’s total staff.

The company said Monday it’s considering moving global headquarters for its various businesses closer to the base of its French operations in Paris. Annual cost savings should reach EUR 1 bln (USD 1.2 bln) by 2023 after the measures, also fueled by more efficient purchasing.

Chief Executive Officer Emmanuel Faber, who started the year with a focus on sustainability, is changing tack to address internal management shortcomings. The company has struggled for years to breathe life into its European dairy division despite introducing dozens of new products.

“We had structural weaknesses in the way we worked and organized,” Faber said in a call with analysts. “We were over-innovating, and pushing products we weren’t able to support or that wouldn’t make it as a lasting innovation. It was a misuse of resources.”

The shares fell as much as 2.5%. They have lost more than a quarter of their value this year, while Nestlé has dropped 3.7%.

Previously reported that in the period January-September 2020 Danone sales fell by 5.4% YoY to EUR 18 bln.