Global meat processor Danish Crown has announced it will consolidate its group functions, which it said would result in a reduction in the number of employees at the company.
The reduction in employees will reportedly happen over the next two to three years, said Danish Crown, as the transition to the new organisational model was expected to generate efficiency improvements of approximately DKK 500 million over the same time period.
The company said that over the past year the group had “improved its competitiveness” and laid the foundation for a new ownership model. Danish Crown said that it was now moving away from its previous conglomerate structure, which it said would be done through a “new organisational structure”.
Danish Crown consists of eight business units: Industry, Foods, Beef, UK, KLS, Sokolow, ESS-FOOD and DAT-Schaub. It said that workforce adjustments will take place gradually across countries and business units, with local consultation processes expected to begin in early June.
Group CEO Niels Ulrich Duedahl commented: “We need to normalise Danish Crown fundamentally, so we resemble other international companies in our industry. Today, our business units largely operate as independent companies. We are changing that by bringing our businesses closer together. We need to operate as one fully integrated group across business areas and across countries.”
Danish Crown will reportedly consolidate a number of central group functions that are currently “largely embedded” in the individual business units.
It said that a key element of the new model is to “create a simpler organisation” with fewer management layers, broader and more clearly defined leadership roles, and more direct reports under each individual manager.
A total of around 800 positions will be reduced across Danish Crown over the two to three-year time period, it said, with the restructuring set to affect managers and white-collar employees as central group functions are consolidated across business units.
Duedahl continued: “By consolidating functions at group level, we can leverage our scale better, work more consistently across the organisation and create a more efficient operation. Instead of doing things differently depending on which country you are based in, we need shared standards, systems, and targets. Over the next two to three years, this means fewer management layers and fewer employees.
“At Danish Crown we have improved our competitiveness, but we still have significant untapped potential that we believe we can realise. The competition in the global food market is intense, and our owners are facing challenging times due to the quotation level. This reinforces the need to continue our transformation to improve our competitiveness and the quotation to our owners. This is an important step in that journey.”
