Dairy giant Fonterra to outsource labor to India, Philippines
AUCKLAND, NEW ZEALAND — Dairy giant Fonterra is set to cut jobs at its New Zealand headquarters as part of a strategic move to outsource labor to India and the Philippines.
The proposed changes were announced during an operating model review for the dairy co-operative, which has its central finance staff.
Proposed changes to finance operations
Andrew Murray, Fonterra’s incoming chief finance officer, confirmed that the changes would involve co-sourcing elements of the company’s transactional work with an existing partner who has facilities in Bangalore and Manila.
“The changes relate to us optimizing core operational efficiency to support the entire business,” Murray stated.
He emphasized that the proposed changes aim to create financial value for Fonterra’s farmer shareholders.
Local concerns over job cuts
However, the announcement sparked concerns among local stakeholders. Waikato Federated Farmers dairy chairperson Matthew Zonderop expressed his understanding of the need to increase shareholder financial returns but questioned the decision to outsource jobs overseas.
He argued that the New Zealand co-operative should prioritize supporting local staff. “We should be keeping that money in New Zealand. I mean, that’s what this company is; it’s New Zealand-built, New Zealand-made.”
Technological alternatives
Zonderop also highlighted the availability of new technologies that could potentially keep jobs within New Zealand.
“There’s plenty of technology available now to be able to keep those jobs in New Zealand. If it’s just accounting, you can do that with AI, Microsoft Co-pilot chat, [GPT],” he added.
Impact on regional sites
In addition to the proposed outsourcing, Fonterra’s regional sites at Waitoa and Te Rapa will also be affected. Later this year, 51 roles will be impacted by the closure of four manufacturing plants in October, although some employees will be redeployed, and some positions are already vacant.
Consultation on the proposals is set to end on Friday, leaving employees and stakeholders awaiting the final decision. The outcome will determine the future of numerous jobs and the operational direction of one of New Zealand’s largest dairy co-operatives.
