Fonterra is to cut 523 jobs, the first publicly-announced result of the dairy co-operative's review of its business.
The New Zealand-based group said the move will generate NZ$55-60m (US$35.9-39.1m) in annualised payroll savings.
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The job cuts follow a review of Fonterra's procurement, finance, information, human resources, strategy and legal teams. One-off severance costs are expected to total NZ$12-15m.
Fonterra has indicated it needs to improve its efficiency in order to invest in growth and deliver returns to its farmer shareholders. Alongside the job cuts, the group said it is also looking at other initiatives to deliver value "right across the organisation".
"The key aims of the review are to ensure that the co-operative is best placed to successfully deliver its strategy, increase focus on generating cash flow, and implement specific, sustainable measures for enhancing efficiency," CEO Theo Spierings said.
"A simple example already identified by our supply chain team is a logistics solution that increases the utilisation of export containers leaving our distribution centres, saving up to NZ$5m a year."
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By GlobalDataSpierings added the job cuts had been "unsettling" for the people affected but insisted Fonterra had to change if it was to remain competitive in the global dairy market. "Reducing the number of roles in our business isn’t about individual competency; it is about continually improving the way we deliver performance."
Fonterra said the affected staff would begin to leave the co-operative in September.
The world's largest dairy exporter also confirmed its review process is extending to additional business structures. From 5 August, the group will be looking at people in administration roles, ingredients sales, consumer, marketing, research and development, communications, health and safety, food safety and quality, group resilience and risk, property, procurement and change management.
