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Kerry Group cuts Brazil workforce as COVID-19 hits restaurant demand

Written by Business World, on 18th May 2020. Posted in Agriculture

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Irish food and ingredients giant Kerry Group PLC is reducing headcount in Brazil as a response to changes in the marketplace caused by the outbreak of the novel coronavirus, three union leaders told Reuters this week.

The job cuts affect nearly 8% of the company's workforce in the country, according to a Reuters calculation.

Kerry had made a strong start to the year but, since March, social distancing restrictions have impacted customer demand at restaurants, fast food chains and bars worldwide, hitting many packaged food producers.

Kerry said in a statement that all six of its facilities in Brazil were "fully operational." It declined to comment further.

A source close to the company, pegging Kerry's total headcount in Brazil at 1,100 people, said there had been "a very small number of redundancies."

The source cited "seasonal" layoffs due to less demand for products such as ice cream as the southern hemisphere heads into winter.

In Cotia, where Kerry mainly makes products like packaged mayonnaise for key customer McDonald's Corp, certain factory lines were temporarily closed amid the health crisis, union director Januncio Batista de Araujo Neto said. He estimated 50 jobs had been terminated, reducing the headcount to around 350.

In Campinas, Kerry's Brazil headquarters, local union president Marcos Araujo said production had not been interrupted, but that "a few" layoffs had occurred.

At dairy and meat ingredient plant Três Corações, 34 people had been laid off, said Rogerio Prado Ribeiro, president of the local union. The factory will now operate six and not seven days a week, Ribeiro said.

The company's taste-and-nutrition business in the Americas posted 3.2 billion euros in annual revenue in 2019, the highest for the segment in any geography, with food service corresponding to 30%, according to public disclosures.

Globally, Kerry is braced for hard times, with the pandemic's impact on second-quarter performance seen as worse than in the previous one. (Reuters)

Source: www.businessworld.ie

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