New Zealand's Fonterra cuts more jobs as dairy prices remain weak

[WELLINGTON] New Zealand dairy exporter Fonterra said on Monday it will cut more jobs than previously flagged as the farmer-owned co-operative struggles with weak dairy prices.

Chief Executive Theo Spierings said Fonterra would cut another 227 jobs, adding to about 520 it announced in July. The cuts amount to more than 4 per cent of Fonterra's 16,000 workers globally.

The redundancies began in July and are expected to be completed by mid-October.

Slowing economic growth in New Zealand's top export market, China, and a global oversupply of milk products have seen dairy prices plummet after reaching record highs in 2013.

Prices have recently recovered slightly and were up 16.5 per cent last week.

Fonterra said in July that it would slash 523 jobs in operations, including finance, information services and human resources. Those cuts would result in payroll savings of up to NZ$60 million (S$53.8 million) a year, following a one-off cost of up to NZ$15 million.

REUTERS