Arla Foods to cut 350 jobs as cost-saving measure

Arla Foods has announced plans to axe more than 350 jobs across its corporate group functions and cheese production and logistics divisions in the UK as part of the company’s internal transformation programme known as Calcium.

Calcium is a three-year transformation programme that has been initiated by the company to improve returns to its farmer-owners, as well as maintain a competitive milk price and re-invest the savings back into business areas that fuel growth.

Arla Foods is planning to optimise its cheddar cheese production activities as part of the initiative in order to improve efficiencies by consolidating operations across its production and packing sites.

The company intends to close production at its Llandyrnog creamery under the initiative, while also moving cheddar cheese production to its Taw Valley and Lockerbie creameries.

In addition, Arla Foods is proposing 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 sites.

The proposed consolidation could impact nearly 154 employees working at the facilities and is expected to take place by the end of this year following a consultation process.

Arla Foods also intends to streamline its corporate operations and support functions as part of the Calcium initiative.

The new proposal is expected to impact 195 positions in the company’s corporate support functions segment.

The impact will be primarily seen at Arla Foods’ head office in Aarhus, Denmark.

However, there would also be a smaller impact at the company’s administrative offices situated at other locations across Europe.

Arla Foods CEO Peder Tuborgh said: “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 agilest and frontline-obsessed companies in today’s fast-paced and complex global food industry.

“It is never easy to say goodbye to valued colleagues, especially in these circumstances, and 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.”

The Calcium programme is expected to deliver a run-rate of at least €400m in savings by the end of 2020.