Dutch food company CSM today (27 October) announced it will shed around 500 jobs after a steep drop in third-quarter profits.
The company’s EBITA excluding one-off costs almost halved to EUR30.3m (US$42.4m) for the quarter, down from EUR56.7m in the same period in 2010. Sales rose slightly to EUR784.8m, up from EUR783.7m last year.
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CEO Gerard Hoetmer said the company has been hit by weak consumer demand, high raw material prices and increased promotional activity undertaken to maintain volume.
“The third quarter has been extremely challenging for the food industry. The industry had already been battling to increase prices to compensate for higher raw material prices and had to do so at a time when consumer confidence was under pressure,” he said today (27 October).
Earlier this month shares in the company plunged following a profit warning and the announcement of company-wide restructuring to save EUR50m by the end of 2013.
Today, CSM confirmed this is likely to lead to the loss of 500 jobs, roughly 5% of the company’s workforce.
Hoetmer added: “The restructuring programme will also entail that we need less people, which I highly regret but which is inevitable in order to achieve a more lean and agile operating model.”
The company announced the fourth-quarter results are also likely to suffer as a result of the current “negative market environment”.
Today, shares in the company dropped 2% to EUR11.54 as of 11.27 BST.
