Danish Crown is to cut around 500 jobs, with the European pork heavyweight’s CEO warning the co-op is “in the midst of a crisis”.
The Denmark-based pork supplier said the move would lead to savings of DKr500m ($73.2m) a year.
Danish Crown has been challenged by a decrease in slaughter pigs and escalating costs, affecting its competitiveness.
In April, the company set out plans to close a slaughterhouse in Ringsted by mid-September, a move it said at the time would result in the loss of about 1,200 jobs and free up around DKr250m for investments over the next three years. Away from the closure of the Ringsted site, the company said it would create up to 300 new jobs at five other slaughterhouses in Horsens, Herning, Vejen and Blans near Sønderborg.
Announcing the latest job cuts on Friday, CEO Niels Duedahl, who took the helm last month, said: “Danish Crown is in the midst of a crisis, and we are facing sweeping changes. Our costs are simply far too high in relation to our earnings.
“It goes without saying that we are obliged to act on this, and we are now adjusting our organisation and focusing one hundred per cent on the core business to ensure better settlements for the farmers who own Danish Crown.”
In the group's 2022/23 financial year, it generated DKr67.6bn, a 5% rise on the previous 12 months. The accounts, issued last November, recorded a drop in EBIT from DKr2.89bn to DKr2.4bn.
By the end of 2023, Danish Crown had reduced its staff numbers in production by around 1,500 and more than 200 other salaried employees.
Duedahl added on Friday: “It affects me deeply, but the planned redundancies are unfortunately necessary if we are to become a financially healthy company again. The good news – although difficult to talk about on a day like today – is that Danish Crown are in control of the situation and can resolve the crisis internally.
“Danish Crown has a long, proud history, and although we are writing a difficult chapter today, we are doing it to be able to write many more positive ones in the future. Behind our problems lies a great untapped potential, which I know a focused organisation can unlock when we make the tough but right decisions.”
In July, the company was implicated in China's anti-dumping investigation into European Union pork imports.
This inquiry, which is perceived as a retaliatory action against the EU's tariffs on Chinese electric vehicles, focuses on pork products intended for human consumption, including fresh, cold, and frozen cuts, as well as pig intestines, bladders, and stomachs.
