Updated 7.37am: The Green Party is extending its sympathies to Fonterra staff facing redundancy, but is blaming the Government for the predicament.
LISTEN ABOVE:Â NZ Dairy Export associate editor Anne Lee talks to Rachel Smalley on KPMG Early Edition about the 523 jobs slashed at Fonterra, and what this means for farmers.
Fonterra has announced that 523 staff members in head office roles will be losing their jobs because of a global decline in dairy prices.
The move is part of the company's business review and will impact those in head office roles.
Fonterra Chief Executive Theo Spierings says the disestablishment of the jobs will come at a one-off cost of $12 million to $15 million and will result in an ongoing payroll savings of up to $60 million a year.
He commented that the news has been unsettling for for the people affected but a change was needed in order for the company to stay competitive in today's global dairy market.
Fonterra's Group Director of Cooperative Affairs, Miles Hurrell says it's just the first stage in the review which will see the whole company assessed.
According to Hurrell the next stage, which starts early next month, will look at a number of other areas in the business and post that they'll determine whether there'll be further cuts.
But the University of Waikato's professor of agri-business, Jacqueline Rowarth questions how the company will support the work that was previously being done, despite the potential ongoing payroll savings of up to $60 million a year.
She said it wouldn't be the first time the company has gone overboard with its cuts.
"Fonterra has been through a reorganisation before it lost about 300, two or three years ago, and many of them got re-employed after it was realised that they were doing valuable work, I gather."
Green MP Eugenie Sage says the job cuts are a tragedy for the affected staff and their families and show the human effects of tumbling dairy prices are being felt throughout New Zealand.
"The government has put all of the eggs in the dairy basket. It's encouraged Fonterra and the industry to increase supply, to fail to recognise that we need to be adding value to what we are producing, not just producing more."
The Minister for Primary Industries, Nathan Guy, is choosing not to talk about the restructuring.
His office says it's a matter for Fonterra and its shareholders.
But the Economic Development Minister is under-playing our dairy industry's failures.
Whole milk prices have been the hardest hit, dropping 13% and following a drought and the global over supply of dairy.
Minister Steven Joyce said they've been through it before and will ride it out.
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