Valio, the Finnish dairy group, has begun negotiations with around 2,900 employees with the expectation that 320 positions will be eliminated from its operations division and head office.
The company, which has seen sales and profits under pressure from the Russian trade embargo, said that the move comes as it realigns its cost base to the "current operating environment".
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Valio said the Russian embargo cut net sales by around one-fifth while consumer purchasing power in Finland has weakened, resulting in price pressure in its domestic market. "Valio cannot compete in basic milks in its domestic market due to an interpretation of the country’s Competition Law, as a consequence of which the company’s market share of basic milks has fallen to less than 30%," the company added.
"Most of the milk that was previously exported to Russia is now processed into milk powder and industrial butter for the global market, and their profitability is of a completely different order to consumer products exported to Russia. Exports to Russia are still under embargo and uncertainty there is expected to continue for a long time," Mika Koskinen, EVP of operations, explained.
He said customer marketing, consumer services and technical services will be reorganised. The negotiations are expected to last six weeks.
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Valio currently employs in total some 4,400 people, around 3,600 of whom work in Finland.
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