Nestle today (25 April) announced plans to cut almost 300 jobs from its confectionery business in the UK.
The world’s largest food maker said 298 jobs across four plants could go under a move to make the sites “operate more efficiently and remain competitive in a rapidly changing external environment”.
Under the plans, the production of Nestle’s UK-centric Blue Riband biscuit brand would move from one of the four UK sites to a plant in Poland.
Nestle is to hold talks with union officials “as soon as possible”.
The GMB union called the news “extremely disappointing”. Tim Roache, the GMB’s general secretary, said: “To shift the production of an iconic British brand like Blue Riband to Poland is completely unacceptable. Nestle are throwing people’s lives, and those of their families, into turmoil for the sake of increasing profit margins.”
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In recent weeks, Nestle’s new CEO, Mark Schneider, who joined the KitKat maker in January, said the company would be spending more on “restructuring” measures this year than in 2016 “to drive future profitability”.
Schneider said in February Nestle would spend around CHF500m in 2017 on restructuring initiatives. Last week, when Nestle announced its results for the first quarter of 2017, the company underlined it would “increase restructuring costs considerably in 2017”.
In 2016, Nestle’s global confectionery sales stood at CHF8.68bn, equivalent to a 1.8% year-on-year rise on an organic basis. The trading operating profit margin from the division fell by 30 basis points to 13.8%.
In the first quarter of this year, Nestle’s confectionery sales fell 2.9% on an organic basis. Nestle pointed to the earlier Chinese New Year and later Easter in 2017. However, CFO Francois-Xavier Roger said Nestle had had “some pockets of good performances with Kit Kat in Europe and in Japan”.
