Danone has announced new cost saving targets, up to 2,000 staff cuts and plans to reshape into a “local-first” company, as part of its efforts to become a more efficient organisation in a post-Covid world.
The owner of Activia and Alpro is shifting from a category-led to local organisation, focusing on geographical areas rather than product categories. The move to “reinvent itself” will reportedly enable local business units to regain autonomy and will shorten decision-making processes.
The announcement finalises the plans that Danone laid out on 19 October to adapt to a new Covid-world and aims to turn around performance that has suffered during the pandemic such as a fall in bottled water sales.
As mentioned in October, the company will be organised into two macro-regions. Shane Grant will lead Danone North America and Véronique Penchienati-Bosetta will head Danone International.
As part of its restructuring efforts, Danone International will be organised under five zones: Europe, Asia/Africa & Middle East, Greater China & Oceania, CIS & Turkey and Latin America. The move will see the following people appointed to zone presidents and promoted to the executive committee in 2021.
Around 1,500 to 2,000 positions will be cut as a result of the simplification, including one in four positions at Danone’s global headquarters.
Through the above changes, Danone expects to generate €1 billion of savings by 2023 including through 20% reduction in overhead costs.
The company also predicts that it will return to profitable growth in less than 12 months, as soon as the second half of 2021. Finally, Danone is also looking at relocating its global headquarters in Paris closer to its French business headquarters.
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