Danish Crown to eliminate 800 positions as restructuring drive targets US$77.9M in savings

DENMARK – Danish Crown will reduce its workforce by approximately 800 positions over the next three years as the company reorganises its operations and combines key functions across its business divisions.

The planned reductions will primarily affect management and office-based employees as the Danish meat producer moves to centralise several group-wide functions that are currently spread across different units and locations.

Accordingly, the workforce changes will be implemented across multiple countries and business segments as the company seeks to streamline its organisational framework and reduce layers of management.

The restructuring programme is designed to create a leaner management structure, with leadership responsibilities being expanded and managers overseeing larger teams through an increase in direct reporting lines.

CEO Niels Ulrich Duedahl said the company’s various business divisions have historically operated with a high degree of independence, adding that Danish Crown now intends to bring those operations closer together under a more unified group model.

Integration Strategy

As a result, the company plans to introduce common standards, systems and performance targets across its operations rather than allowing practices to differ between countries and business areas.

Duedahl said the transition towards a more integrated organisation would require fewer management levels and a smaller workforce over the next two to three years as the company reshapes its operating model.

Danish Crown currently operates eight business units, including Industry, Foods, Beef, its UK operations, Swedish slaughterhouse KLS, Polish subsidiary Sokołów, meat trading business Ess-Food and casings producer DAT-Schaub.

The company estimates that the organisational changes will generate efficiency-related savings of about US$77.9 million once the restructuring measures are fully implemented.

Profit Decline in First Half

The announcement follows weaker first-half financial results, with Danish Crown reporting that operating profit fell to approximately US$98.3 million from about US$207.3 million recorded during the same period a year earlier.

Meanwhile, the company said outbreaks of African swine fever in Spain affected livestock supplies and contributed to pressure on earnings during the six-month period.

Revenue also moved lower, declining 2.6% to roughly US$4.93 billion as slaughter volumes decreased and average selling prices weakened amid challenging conditions in the European fresh meat market.

In addition, Danish Crown linked some of the market pressure to increased meat supply in Europe following Chinese tariff measures, which affected pricing conditions across the sector.

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