UK – Arla Foods is announcing changes to a number of its corporate Group functions and to its cheese production and logistics in the UK as part of the on-going internal transformation programme Calcium.
According to the company, from the changes as announced, 195 people are expected to lose their jobs across the affected corporate support functions.
Arla recently launched a three-year programme to achieve US$479 million savings and transform the company into more competitive and efficient one.
The programme, called Calcium, aims to reshape Arla’s organisation to focus even more on the frontlines of the business, where the value exchange takes place with customers and consumers.
One of the requirements to achieve this is the streamlining of the company’s corporate operations and support functions.
This process has now begun, starting with global functions such as Finance, Legal & IT, Corporate Strategy, Member Relations, HR & Corporate Affairs.
The impact is predominantly at the company’s head office in Aarhus, Denmark, however with smaller numbers of positions affected at the company’s administrative offices elsewhere in Europe.
Arla announced a proposal to cease production at its Llandyrnog creamery, consequently moving cheddar cheese volumes to its Taw Valley and Lockerbie creameries.
In addition, it proposed the integration of all its cheddar cheese packing lines into its Oswestry packing facility, which will result in the closure of its smaller Malpas and Lockerbie packing operations.
The proposed consolidation, subject to the completion of the consultation process, could put around 154 roles at risk of redundancy by the end of 2018.
Over the next three years, the Calcium programme will transform activities throughout Arla, including production, products, procurement, promotional marketing and people.
“We want to achieve the goal of building a stronger, more competitive Arla, which serves our customers and consumers better and provides higher returns to our farmer owners and that requires us to make tough decisions.
In order for Arla to continue to deliver on our Good Growth 2020 strategy that brings innovative dairy products to millions of consumers around the world, we must become one of the most agile and frontline-obsessed companies in today’s fast-paced and complex global food industry,” said CEO of Arla Foods, Peder Tuborgh.
“It is never easy to say goodbye to valued colleagues, especially in these circumstances.
I would like to thank those people who are leaving us for the contribution they have made to Arla Foods and I wish them well for the future.
We will provide our full support to those colleagues affected during this process,” he said.
Arla expects to communicate openly about the process over the course of the programme.
The Calcium programme will deliver a run-rate of at least US$479 million of savings by the end of 2020, and the profit impact will build throughout the life of the programme.