Nestlé's Job Cuts and plant closures in Germany: A Mixed Approach to Cost Optimization
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Demonstration against Nestlé's reduction in workforce - Demonstrations rising due to Nestlé lowering product costs
Employees of global food titan, Nestlé, have taken to the streets in protest against the ongoing job losses in Germany. The demonstrations outside Nestlé's Germany headquarters in Frankfurt are revolving around the potential loss of 230 jobs at the Neuss near Düsseldorf and Conow in Mecklenburg-Vorpommern locations. The NGG union claims these cuts are another step in a long-term trend by the world's largest food manufacturer to maximize profits.
A near 50% reduction in workforce
In response to the looming layoffs, the communication campaign dubbed #OnTheWayToBetter for employees seems like a bad joke, according to Andreas Zorn, chairman of Nestlé's Germany works council. He contends, "This trend of job cuts in Germany by Nestlé has been going on for years. They've been drastically reducing jobs and shifting production to countries like Eastern Europe, where wages are significantly lower." In 2014, Nestlé had 12,400 employees in Germany, which has now dwindled to a mere 6,500. Zorn alleges that investments in the plants are insufficient, and if the trend continues, Germany might not have a single Nestlé plant in 20 years.
Not all jobs are heading out
Per company statements, the Neuss plant will be shuttered by mid-2026, and the Conow plant in Mecklenburg-Vorpommern will be sold. The new owner is said to take over the 80 employees at Conow. 30 jobs at Neuss, related to the production of mustard and mayonnaise tubes, will be moved to Lüdinghausen near Münster and offered to the affected employees.
Nestlé remains dedicated to producing in Germany, states a company spokesperson. The decisions on the two plants, however, were not easy, according to the spokesperson. "Rising costs and increasing price sensitivity from consumers have led to declining volumes and overcapacities in the culinary products sector in recent years."
The demonstrators, numbering around 300, voiced criticism towards a financially sound company shifting jobs to further boost profits. Their placards bore slogans like "People before Profit" and "Mismanagement destroys jobs."
Almost 11 billion Swiss francs in profit
Last year, Nestlé's global sales saw a 1.8% downturn to CHF 91.4 billion, accompanied by a 2.9% decrease in profit, amounting to CHF 10.9 billion. The new CEO, Laurent Freixe, has already unveiled cost-cutting measures.
In the social plan negotiations for Neuss, good progress has been noted, according to the Nestlé spokesperson. There will be offers for partial retirement, along with a transfer company to aid employees in further education and qualification.
Insights:
Nestlé's job cuts and plant closures in Germany seem to represent both long-term strategic adjustments and cost-cutting measures. Plans to shutter factories might be a reaction to overcapacity and weak demand faced by European companies[1]. Concurrently, Nestlé's 'Fuel for Growth' program indicates a broader, more strategic approach towards optimizing operations and enhancing competitiveness[5]. Therefore, these actions are part of a strategic effort to align resources with business needs, rather than purely being responsive to current economic trends.
- The employees of Nestlé, the world's largest food manufacturer, are protesting against ongoing job losses in Germany, particularly the potential loss of 230 jobs at the Neuss and Conow locations, claiming these cuts are part of a long-term trend to maximize profits.
- Although Nestlé plans to close the Neuss plant and sell the Conow plant, the new owner will take over the 80 employees at Conow, and 30 jobs at Neuss related to the production of mustard and mayonnaise tubes will be moved to another plant and offered to the affected employees.
- The demonstrators criticize Nestlé's job cuts, pointing out that the financially sound company is shifting jobs to further boost profits. Despite the controversy, Nestlé remains dedicated to producing in Germany, with the company's spokesperson highlighting the need to reduce costs and address declining volumes due to increasing price sensitivity from consumers.
