Arla to cut 500 jobs despite ‘huge task’ of finding markets for extra milk supplies
On the back of announcing a strategy last year to grow its business over the coming years, Arla has announced it will be cutting 500 jobs.
In December, Arla announced its Strategy 2020 setting out to grow its business in eight global dairy categories and six market regions as the company moves towards 2020 as one effective and unified company in a dramatically changing global dairy market.
This year, Arla says, it faces a ‘huge task’ to create profitable positions for an extra 600m kg milk and protect Arla’s performance.
As part of its strategy, it is anticipated that Arla’s farmers will grow their milk production by another 2.5 billion kilos by 2020.
However, it has now announced the structural changes which it says will include 500 roles going across its markets.
“Arla has grown its business significantly in recent years both organically and through mergers. However, more milk is being produced globally, Europe is experiencing pressure on prices and very little growth, which means competition is fierce,” says Arla CEO, Peder Tuborgh.
“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.”
It says the result will be that teams that sit in Arla’s markets will fully focus on performance through the development of a more commercial approach.
“This is a fundamental change for the company. For many years, Arla has grown mainly through cooperative mergers where the new milk already had a position in the market.
Our continued success depends on our organisation’s ability to increase the value and develop profitable positions for the growing milk volumes coming in now from our existing farmer-owners. We need to act local and think global and the new organisation reflects this,” says Peder Tuborgh.
The Scandinavian farmer-owned dairy has over 12,000 dairy farmers, with 3,000 located in the UK.