Danone seeks more savings as austerity in Europe dents sales

FRENCH food group Danone said yesterday that it plans to cut jobs in Europe in an attempt to save €200m (£162.2m) over the next two years.

The company, the biggest yoghurt maker in the world, said job losses will be restricted to managerial roles, and will be based on voluntary departures, but did not comment on how many positions will be cut.

Danone has been struggling to improve European sales through the recession, with a 1.5 per cent drop in third-quarter sales in Europe, and some businesses falling by as much as 10 per cent.

Activist investor Nelson Peltz, who has a one per cent stake in the company, has been pressuring the company to save profits and reduce costs.

Danone spokesman Laurent Sacchi denied that Peltz had influenced the decision to cut staff: “We have thought for several weeks, if not months, about a way to regain a competitive edge,” he said.

Danone warned in June that its operating profit margin would fall by 50 basis points to 14.1 per cent this year and investors have been bracing themselves for a similar decline next year as economies deteriorate. Danone has yet to give its official outlook for 2013.