Paris (AFP)

The French agri-food giant Danone, battered by the Covid-19 pandemic, announced on Monday that it wanted to cut up to 2,000 jobs in its headquarters in France and abroad in order to "simplify" its organization, resume growth and increase its profitability .

"In France, it will be 400 to 500 people", "mainly directors, managers", who will be affected by these job cuts, Danone CEO Emmanuel Faber told AFP.

Danone also plans to "merge" the world headquarters, located in Paris, with that dedicated to French activities, in Rueil-Malmaison, in the Paris region.

The multinational of 100,000 employees expects "a decrease in its general and administrative expenses of 700 million euros, representing about 20% of the structural costs of the company", it is reported in a press release.

Danone is also banking on "new sources of industrial productivity making it possible to reduce the cost of products sold by 300 million euros".

These include "accelerating digitization", the robotization of factories, according to Mr. Faber, from "half a dozen highly digitized factories" today to 40 in 2023. While employees whose tasks will be automated will benefit from a mobility and training plan.

In total, the group is therefore targeting savings of one billion euros in 2023.

"The objective of this plan is to put Danone back on the path of profitable growth which it has always known", argues Mr. Faber.

Over the first nine months of the year, turnover fell 5.4% to 18 billion euros.

The health crisis, with its procession of closed restaurants and bars, particularly penalizes the sales of bottled water (-20.5%) of the group, at the head of the Evian, Volvic and Salvetat brands.

As for Danone's action, around 75 euros a year ago, it has plunged since the start of the pandemic, to drop to 46 euros at the end of October, before recovering.

Around 11:30 am on the Paris Bourse, the title yielded 1.33% to 51.80 euros, in a market up 0.74%.

- "Flight forward" -

Emmanuel Faber "plays his place" and finds himself having to "keep the promises made to the financiers," said Denis Enfert, CGT coordinator for the group, to AFP.

Danone "has embarked on a race for profitability with Coca and Nestlé, which he will never manage to follow", he laments, referring to a "headlong rush".

In a press release, the federation specializing in the food industry, Fnaf-CGT, treats a strategy focused on "high added value products" - "producing less and more expensive" - ​​which is done according to it "to the detriment of volumes, jobs, industrial potential and populations ".

The FGTA-FO, for its part, accuses the group of having paid 1.5 billion euros in dividends in April.

"If the shareholders had given up part of their dividends, this plan would not exist and no position would be deleted", judges the union, stressing that the job cuts concern 25% of the workforce in France.

Danone had already laid down the principle of restructuring last month.

A new organization chart consecrated the end of an organization which highlighted three major businesses (Dairy and plant-based products, Specialized nutrition, Waters), in favor of departments based on geographic areas.

At the same time, he announced a "complete strategic review of the portfolio of brands, references and assets".

"In certain categories, in certain countries, it could go up to 20, 30% of reduction of our assortments, of our formats of products to make sure that we focus on the formats which are the most requested" in this period of upheaval, explains Mr. Faber.

For the CEO, the Covid-19 pandemic "sounds like a warning": "External shocks, the volatility of our environments must lead to the creation of a safety margin", a "floor" below which profitability must not go down in order to have "leeway" to invest.

He expects a return to "profitable growth" in the second half of 2021, and a return to a "pre-Covid margin", greater than 15%, from 2022. In 2020, the group's current operating margin - i.e. the ratio between its operating profit and turnover - is expected at 14%.

© 2020 AFP