DSM to make organisational changes to adapt to global market

By Andrew MCDOUGALL contact

- Last updated on GMT

DSM to make organisational changes to adapt to global market

Related tags: Board of directors, Management

Royal DSM announces that it is making adjustments to its organisational and operating model as it looks to create a more focused and cost efficient organisation, with a clearer market focus on a global scale; but this will mean job losses.

The company claims these changes will result in structural savings of €125-150 million to be fully achieved by the end of 2017.

DSM will also strengthen its management structure by establishing an Executive Committee, enabling faster strategic alignment and operational execution.

“In an increasingly global and fast-paced business environment we need to adapt our organizational and operating model to service our customers even better,” ​says Feike Sijbesma, CEO and Chairman of the Managing Board, Royal DSM.

“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.”

So what will this mean for DSM?

The company’s business groups will not change substantially with more focus placed on their primary functions, but in other departments there will be job losses.

The new changes announced will see the company aim to cut costs while pooling resources and making it clearer to identify 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.

DSM says the new organizational model will apply to Finance, HR, Legal, IT, Business Services, Indirect Sourcing, Communications and Corporate departments as well as the Regional centres; whilst it will also implement efficiency measures in its major R&D centres around the world.

The plans will see a reduction in headcount of 900-1100 FTEs, of which approximately half in the Netherlands and to be fully implemented by the end of 2017.

The structural savings from the reduced headcount and lower spend are estimated at €125-150 million compared to 2014, to be fully achieved by end of 2017.

One-off restructuring charges, including severance costs, are estimated at €150-175 million before tax.

Committee announced

As mentioned above, the company will also establish an Executive Committee hoping to increase focus on the development of the business.

The members of the Executive Committee will be the Managing Board members Feike Sijbesma (CEO/Chairman), Geraldine Matchett (CFO), Stephan Tanda (Life Sciences) and Dimitri de Vreeze (Materials Sciences), as well as Chris Goppelsroeder (Nutritional Products), Philip Eykerman (Strategy and M&A), Rob van Leen (R&D and Innovation) and Peter Vrijsen (Human Resources).

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