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Danone says to cut 900 jobs as profits stagnate

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(Globalpost/GlobalPost)

French food industry group Danone said it would cut 900 management and administration jobs across Europe as it reported a flat net profit for 2012 of 1.81 billion euros ($2.4 billion).

The cuts represent 10 percent of managerial staff in Europe with the aim of saving 200 million euros over two years and to boost flagging sales in Europe, the firm said.

Danone chairman and chief executive Franck Riboud said in a statement that European sales were "under pressure from a severe deterioration in overall consumer demand", falling by 3.0 percent last year compared to the level in 2011.

"Clearly this situation is not sustainable, and we will overcome it," Riboud said in a statement.

But outside Europe sales grew by an average of 10.0 percent generating 60 percent of the group's total sales with Russia now Danone's top market by sales on near equal footing with France.

The current operating margin fell by 0.5 percentage points.

The company said that the job cuts would be achieved by relocation within the company and through voluntary departures. The company said it would a provision 450 million euros in 2013.

The price of shares in the company rose by 5.50 percent in afternoon trading on a Paris market up by 1.67 percent.

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http://www.globalpost.com/dispatch/news/afp/130219/danone-says-to-cut-900-jobs-as-profits-stagnate