In an attempt to cut cost and revive profitability, the world’s largest yogurt maker, Danone will cut as many as 2,000 jobs, including one in four positions at its global headquarters.
Danone has global headquarter sites across the world in locations such as Amsterdam and Singapore. About 400 to 500 jobs will be cut in France, a spokesman said.
The job cuts represent about two percent of Danone's total staff.
The company also said that it is considering moving global headquarter sites for its various business lines closer to the base of its French operations in Paris.
Annual cost savings should reach 1 billion euros (S$1.59 billion) by 2023, also fueled by more efficient purchasing.
Chief executive officer Emmanuel Faber is shifting the organization to focus on geographical zones rather than product categories to become more agile amid the pandemic. Competitors like Nestle have long followed a regional strategy.
"This year has shown our businesses could be hurt significantly in their competitiveness by external shocks in countries where we operate," Faber said on a call with reporters. "In this very volatile world for the next several years, we need to create a safety margin."
The company also plans to reduce the range of products it sells by 10-30 percent in the next year, focusing on faster-growing and more profitable products.
Total one-time costs related to the changes will be about 1.4 billion euros for the 2021-2023 period.
Danone also said its adjusted operating margin should exceed 15 percent in 2022 and reach mid-to-high teen levels later, which would be a record level. Danone shares have slumped 29 percent this year.