DSM adjusts its organizational model: 1,100 jobs will be cut
Royal DSM, the global Life Sciences and Materials Sciences company, announces adjustments to its organizational and operating model, changes that will lead to a reduction in headcount of 900-1,100 FTEs (Full-time equivalent).
Approximately half of these jobs are in the Netherlands. They adjustment are to be fully implemented by the end of 2017.
The structural savings from the reduced headcount and lower spend are estimated at EUR 125-150 million compared to 2014, to be fully achieved by end of 2017. One-off restructuring charges, including severance costs, are estimated at EUR 150-175 million before tax.
Following recent portfolio changes, these adjustments aim to create a more agile, focused and cost efficient organization, with a stronger business and market focus and globally leveraged support functions.
DSM will also strengthen its management structure by establishing an Executive Committee, enabling faster strategic alignment and operational execution.
In addition to the changes above, DSM is developing a business (growth) improvement and efficiency program for the Nutrition business that will be communicated at the Capital Markets Day on November, 4.
Feike Sijbesma, CEO/Chairman of the Managing Board, Royal DSM commented: “In an increasingly global and fast-paced business environment we need to adapt our organizational and operating model to service our customers even better. With the adjustments announced today, we become more agile, focused and cost-efficient. Businesses fully focus on growth, while at the same time we become more competitive by leveraging our global support functions.”
Global Support functions
The support functions will be globally leveraged across DSM to capture scale-benefits and deliver high-quality professional support at lower costs, among others via further standardization of processes, delayering, and elimination of duplications, resulting in a more efficient pooling of resources with clearer accountability for performance. This will lead to a reduction in size of the support functions, also in view of the transfer into partnerships of the Pharma, Polymer Intermediates and Composite Resins businesses.
This new organizational model will apply to Finance, HR, Legal, IT, Business Services, Indirect Sourcing, Communications and Corporate departments as well as the Regional centers. In addition, DSM will implement efficiency measures in its major R&D centers globally.
The DSM business groups remain the cornerstones of the company and their focus will be on the primary functions of the company: Innovation and R&D, Direct Sourcing, Manufacturing & Operations and Marketing & Sales.