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Friday 20 May 2022

Synlait looks for 150 layoffs to save up to $12m

8th September 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

Synlait Milk is looking to cut its headcount by around 150, or 15% of its workforce, to generate savings of up to $12m per annum.

The listed dairy company said this morning that it told staff it had started consultation to “update its organisational structure”.

Acting chief executive John Penno

“Synlait has been through a lot of change over the last 12 months,” acting chief executive John Penno said.

This means some areas are now over-resourced, and some areas are under-resourced. We need to review and reset the structure of our business to match our current goals to be successful.”

Synlait said it employed just over 1,000 staff so the restructure could see as many as 150 jobs go in an effort to generate a potential annual savings of approximately $10m to $12m.

The company has seen its share price tumble from more than $9 in 2019 to graze $3 earlier this year, with its fortunes linked to that of its major customer and strategic partner, the beleaguered A2 Milk.

In an earnings update in May, Synlait said it expected to make an after tax loss of between $20m–$30m in FY21.

The business has also seen a number of senior executives depart in the past 12 months, most notably former chief executive Leon Clement, who surprised the market when he stepped down suddenly in April.

In the statement released today, Synlait said the proposed changes were designed to align leadership and resourcing around key business units, namely nutritionals, ingredients, and liquids.

The measures would “remove any unhelpful hierarchy from the organisation to ensure staff have the information, resources, and freedom to act as they need to, to do their jobs every day”.

Penno added that the firm was also on a “journey to transform our culture”.

“We need to build teams that are working together with clear roles and responsibilities, and the systems needed to chase the growth we are looking to achieve. This is not just a cost out exercise, it is a complete reset of how we operate as a business,” he said.

The company would discuss the proposed changes with impacted team members and union representatives over the next two weeks.

A further update would be provided along with Synlait’s full year 2021 results to be released on Monday 27 September.

 

 


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