(Reuters) - New Zealand dairy group Fonterra (FSF.NZ) (FCG.NZ), which is expected to report its worst annual loss next week, has scrapped bonuses and frozen the pay of about 7,000 employees, according to an internal email to staff seen by Reuters.
Employees at the world’s biggest dairy exporter earning over NZ$100,000 ($64,000) a year will not receive a pay rise this year, according to the email sent on Tuesday by Chief Executive Miles Hurrell.
“This has been a tough call, but it’s also the right one,” Hurrell wrote.
About 7,000 employees will be affected by the decisions, a Fonterra spokeswoman told Reuters. Fonterra has a total workforce of more than 22,000 people, according to its 2018 annual report.
Hurrel said bonuses based on sales and short-term incentives for the year will not be paid.
“Together as a Co-operative we must do what’s right, working together to reset our business and get us back to a position where we can be proud of our financial performance.”
Employees on collective agreements earning less than NZ$100,000 will not be affected, he said.
Fonterra has taken a series of write downs after it found a few assets to be over-valued, including a Brazilian joint venture with Nestle SA (NESN.S) and farms it owns in China.
Last month, the dairy giant said it was on track to post a full year loss of as much as NZ$675 million, following a loss of NZ$196 million in 2018.
The company will report annual results on Sept. 12.
Reporting by Nikhil Kurian Nainan and Niyati Shetty in Bengaluru; editing by Richard Pullin