Nearly one in 25 people employed at Krones will lose their job. The news came as a surprise to the the workforce of the world's leading manufacturer of filling and packaging technology when announced by CEO Christoph Klenk during Krones’ regular staff meeting on Monday.
Already in July, Krones had to issue a profit warning and announced subsequently a hiring freeze (inside.beer, 11.7.2019). Shortly later the company dismissed its CFO Michael Andersen who had to leave the executive board of the company with immediate effect (inside.beer, 25.7.2019).
Consolidated net income fell dramatically in the first half of 2019. From January to June 2019, Krones’ profit more than halved to EUR 33.3 million from EUR 76.9 million in the same period last year. However, at that time the company still expected a growth of 3% in 2019 and maintained its mid-term targets.
The new measures seem to point to a deterioration of the situation. "The high personnel and material costs are detrimental to Krones' competitiveness. A hiring freeze alone is not enough,” said Klenk on Monday. And he added: "We urgently need improved cost structures in order to remain competitive despite weaker sales growth and to maintain and further expand our market share.”
About 300 to 400 people employed at Krones will lose their jobs. Not only contract workers but also regular employees are affected. 9,619 people currently work for Krones thereof more than two thirds (6.717) at the head office and main production site in Neutraubling, about 120 km north-east of Munich, Germany. Other production sites in Germany are located in Freising, Nittenau, Flensburg and Rosenheim.