Danish Crown is set to eliminate approximately 500 jobs amid warnings from CEO Niels Duedahl that the co-op is “in the midst of a crisis.” The prominent pork supplier based in Denmark announced that this measure aims to achieve annual savings of DKr500 million ($73.2 million).
The organization has faced significant challenges due to a decline in the number of slaughter pigs available and rising operational costs, which have ultimately impacted its competitive edge in the market.
In April, the company outlined plans to close a slaughterhouse in Ringsted by mid-September, a decision anticipated to lead to the loss of around 1,200 jobs while freeing up approximately DKr250 million for investments over the next three years. Despite the closure at Ringsted, Danish Crown mentioned that it would create up to 300 new positions across five other slaughterhouses located in Horsens, Herning, Vejen, and Blans near Sønderborg.
During the announcement of the latest job cuts, Duedahl, who assumed the CEO role just last month, emphasized, “Danish Crown is in the midst of a crisis, and we are facing sweeping changes. Our costs are simply far too high in relation to our earnings.” He further added, “It goes without saying that we are obliged to act on this, and we are now adjusting our organisation and focusing one hundred percent on the core business to ensure better settlements for the farmers who own Danish Crown.”
In the financial year 2022/23, Danish Crown reported revenues of DKr67.6 billion, representing a 5% increase year over year. However, EBIT fell from DKr2.89 billion to DKr2.4 billion. By the end of 2023, the company had already cut about 1,500 production jobs and reduced its salaried workforce by over 200 positions.
Duedahl expressed the emotional toll of the layoffs, stating, “It affects me deeply, but the planned redundancies are unfortunately necessary if we are to become a financially healthy company again. The good news – although difficult to talk about on a day like today – is that Danish Crown is in control of the situation and can resolve the crisis internally.”
He expressed optimism for the future, noting, “Danish Crown has a long, proud history, and although we are writing a difficult chapter today, we are doing it to be able to write many more positive ones in the future. Behind our problems lies a great untapped potential, which I know a focused organisation can unlock when we make the tough but right decisions.”
In July, Danish Crown was implicated in China’s anti-dumping investigation into EU pork imports, a situation perceived as retaliation against the EU’s tariffs on Chinese electric vehicles. The investigation targets various pork products for human consumption, including fresh, chilled, and frozen cuts, along with pig intestines, bladders, and stomachs.
In conclusion, Danish Crown’s proactive measures reflect shifts driven by emerging food and beverage industry trends. As the company adapts to the evolving food and drink business landscape, it aims to enhance its competitiveness and financial stability. This aligns with broader food and drink consumer trends emphasizing efficiency and sustainability in the supply chain.
