UK jobs ‘unlikely’ to be hit by DSM restructure

By Nicholas Robinson contact

- Last updated on GMT

DSM will cut up to 1,100 jobs across its business
DSM will cut up to 1,100 jobs across its business

Related tags: Strategic management

Global ingredients manufacturer Royal DSM’s plans to slash up to 1,100 jobs across its business are ‘unlikely to affect’ British workers, a source close to the firm has said.

DSM, which has operations in the UK, Europe, US and Asia, announced it would cut between 900 and 1,100 jobs in a major restructure to save up to £110M (€150M) yesterday (August 25).

The savings and job cuts would be made over the next two years and be fully achieved by the end of 2017, said the £7.3bn turnover firm. However, severance costs and one-off restructuring charges would cost DSM more than £120M, it added.

A source close to the firm, who did not want to be named, told it was unlikely many, if any, British jobs would be affected because the cost-cutting wouldn’t affect manufacturing.

Only one UK-based facility

DSM job cuts in figures

  • Up to 1,100 jobs to be cut
  • £110M will be saved
  • It will cost over £120M to restructure
  • 25,000 employed by DSM

The firm had only one UK-based manufacturing facility in Scotland, according to the source.

The majority of the job losses would come from the business’s support functions, with approximately half of them being made in the Netherlands where the company is headquartered.

Support functions most-likely affected by the cuts included roles in: finance, human resources, IT, business services, indirect sourcing, communications and corporate departments and regional centres.

Chief executive and chairman of DSM Feike Sijbesma said: “In an increasingly global and fast-paced business environment, we need to adapt our organisational and operating model to service our customers even better.

“With the adjustments announced today, we become more agile, focused and cost-efficient. Businesses fully focus on growth, while at the same time we become more competitive by leveraging our global support functions.”

DSM’s management structure would also be strengthened through the development of an executive committee, which would enable faster strategic alignment and operation execution, Sijbesma added.

Efficiency programme

The firm will also develop a business growth and efficiency programme for its nutrition arm, which would be revealed in November.

Efficiency measures would also be implemented in the company’s research and development (R&D) functions.

Sijbesma added: “The DSM business groups remain the cornerstones of the company and their focus will be on the primary functions of the company – innovation and R&D, direct sourcing, manufacturing and operations, and marketing and sales.

“The optimisation of the support functions will enable the business groups to increase their business and market focus and operate in today’s business environment with greater agility.”

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