Emmanuel Faber has not been CEO of Danone since March 14, but his reorganization plan has been launched. Called “Local First”, it should result in 1,850 job cuts, including 458 in France. These figures were presented to trade unions on Wednesday March 31.
By moving from an organization by business line to an organization by country, Danone management estimates that it will be able to reduce its costs by 700 million euros. An amount increased to 1 billion euros taking into account increased digitization of functions. The majority of the jobs lost relate to managerial or administrative roles.
Typically, instead of having, in each country, three bosses for mineral water, dairy products and specialized nutrition, supported for each of these categories by a management committee of around ten people, there is no will remain that one. Even two in Europe, because in this region, according to several sources, specialized nutrition, the result of a recent merger between medical activities and infant nutrition activities, will be preserved.
Margins versus growth
In France, the headquarters of the agrifood group, located boulevard Haussmann, in the 9e arrondissement of Paris, before a transfer of the teams to Rueil-Malmaison (Hauts-de-Seine) in November 2020, is primarily concerned. A second project is added to it, called “Olympic”, aimed at pooling sales forces in France. “It should result in a hundred additional job cuts”, says a union source. Discussions will begin with union representatives for the establishment of a job protection plan.
The genesis of the Local First plan dates back to the end of 2019, well before the Covid-19 pandemic. Danone has just issued a warning on its results and Mr. Faber wants to reduce costs. He drew up a diagram, with the help of the McKinsey firm, which he presented to the directors after the summer of 2020. The reception was reserved. Some are worried about a new upheaval, in the midst of a pandemic, when the company has already undergone several reorganizations.
Very quickly, this project crystallized the criticisms against Mr. Faber, considered insufficiently attentive to his board of directors and his shareholders. Former CFO, Mr. Faber focuses on margins, when his opponents would like to prioritize sales growth. It is this message that will pass, between December and March, the British activist fund Bluebell, then the American investor Artisan.
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