AkzoNobel will cut about 2,000 jobs as the owner of Dulux comes under pressure to slash costs and keep up with competitors.
The Dutch paint producer said on Tuesday that it planned to make the cuts, equivalent to more than 5 per cent of its workforce as of this summer, by the end of 2025.
AkzoNobel reported a total workforce of 35,700 in June.
The group last year revealed it had been forced to slash jobs and production in Europe, intensifying concerns about the resilience of European industry as the continent struggled with rising energy costs following Russia’s full-scale invasion of Ukraine.
Despite inflation recently easing for peers across the continent, where manufacturers were hit particularly hard by cuts to Russian gas supplies, AkzoNobel warned that it continued to struggle with high costs.
Amsterdam-traded shares in AkzoNobel rose 1 per cent in morning trading, having declined 14 per cent over the past year.
The group, one of the world’s largest paint producers, did not comment on where its latest round of job cuts would be made. But internal communications seen by the Financial Times said the company’s issue included a disproportionately large number of managers as well as high marketing, administrative and research costs compared with similar businesses.
Chief executive Greg Poux-Guillaume said the move would help the business “become more agile in volatile markets and offset headwinds such as rising labour costs”.
AkzoNobel was aiming “to accelerate profitable growth by optimising our functional organisation to become more agile”, he added.
Despite the concerns over profitability, AkzoNobel’s earnings have risen in recent months, with the group reporting that first-half profits before tax rose 27 per cent against a year earlier to €496mn.
The company has said it expects to report adjusted earnings of at least €1.5bn for the full year, an increase over the €1.4bn reported last year.
The job cuts follow a rise in the group’s workforce from 32,800 to 35,700 over the past three years.
They are also being made despite costs falling generally across the Eurozone, where inflation slowed in August to a three-year low of 2.2 per cent. This prompted a quarter percentage point rate cut this month by the European Central Bank, which said labour costs remained high but were “moderating”.
AkzoNobel generates almost half of its revenues in Europe, the Middle East and Africa. The group warned in July that operating cost inflation, particularly in wages, was continuing to weigh on its profitability.
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