DSM reshuffle spells 1000+ job losses

By Annie Harrison-Dunn

- Last updated on GMT

DSM says further cuts in its nutrition division cannot be ruled out
DSM says further cuts in its nutrition division cannot be ruled out

Related tags Nutrition

Nutrition giant DSM has outlined organisational adjustments that will see 900-1100 jobs lost – half of which will be in the Netherlands.

The changes – to be fully implemented by the end of 2017 – are forecast to save the company between €125 and €150 million compared to 2014. 

One-off restructuring charges including severance costs are estimated at €150-175 million before tax.

The rest of the job losses are expected to hit North America, China, Switzerland and other countries.

Growth plans for its nutrition division will be discussed on capital markets day on 4th​ November 2015.

Speaking in a conference call DSM managing board CEO and chairman Feike Sijbesma said further job losses in this separate November announcement could not be “ruled out”,​ but refrained from giving more details.

The cuts announced this week would impact about 20% of DSM’s 4,000 support function workers, which included IT, HR, communications and finance. Its R&D staff would also see ‘efficiency measures’.

Sijbesma said the reorganisation would help the company become “more agile, focused and cost-efficient” ​following a period of investment and divestment.

In March this year DSM bought Hong Kong-based vitamin C producer Aland. The previous year its pharma business completed a €1.9bn merger deal with Patheon to form DPx.

Sijbesma said it was unlikely the company would make any major acquisition moves until these restructure plans were completed.  

I think to be honest it’s healthy for a company if you have a period of portfolio transformation and a lot of divestments and acquisitions, to integrate those acquisitions and to focus now on our own strengths. And that is what we’re doing now basically.”

DSM corporate communications director Herman Betten told NutraIngredients DSM was no longer the small business it once was – and with this growth had come a complex business structure made up of smaller units and as a result duplication.

Asked about redundancy packages, Betten said: “DSM is always taking responsibility and we are always trying to bring people from work to work. However, we cannot avoid forced redundancies. 

“The new structure and the related FTE reductions will be implemented in close cooperation with the local/regional entities and according to the (existing) local frameworks of legislation, social plans and works councils (if applicable).”

The company reported an overall turnover of €1.965bn for all its divisions in Q2 2015, up 12% from the previous year when sales came in it at €1.754bn.

Its food and nutrition ingredients division alone saw sales rise 16% to €1.247bn that quarter, but profits slipped 6% amid ongoing price challenges on some vitamins like vitamin E. 

DSM employs about 25,000 people in total. 

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