21 Sep 2015

Fonterra wields axe again

6:58 pm on 21 September 2015

The number of jobs being cut at Fonterra as it restructures has risen to 750 - almost 30 percent more than it originally signalled.

And the New Zealand dairy giant is not ruling out further job losses.

Fonterra logo

Photo: AFP

Fonterra announced in July that it was axing 523 positions in an attempt to remain competitive in the global dairy market.

In an update released today, Fonterra chief executive Theo Spierings said the purpose of the review was to ensure the company could compete in a rapidly changing global dairy market.

Mr Spierings said the review was an ongoing process that looked across the entire business, identifying areas where improvements could be made.

"We have great people, but we have to make tough decisions to ensure Fonterra remains competitive in this environment," Mr Spierings said in a statement.

"We will continue to fine-tune our organisation to ensure we best support the initiatives identified by our business review."

In July, the company said most of the job cuts it had identified at that stage in its business review would be within New Zealand, from its human resources, finance and information systems departments, and that it was likely more would follow later this year.

The dairy co-operative employs 18,000 staff worldwide, of which 11,500 are New Zealand employees.

Theo Spierings, Fonterra CEO

Theo Spierings, Fonterra CEO Photo: RNZ / Diego Opatowski

Prime Minister John Key said it was understandable that Fonterra was making job cuts in light of the challenges it has been facing.

Mr Key said Fonterra had had to deal with a low dairy payout, which it had had to justify to its shareholders.

He said in general the agriculture sector had had a good year with wool and beef prices doing well.

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