Shocking move! AkzoNobel to axe 2,000 jobs globally in massive restructuring

In a dramatic and far-reaching decision, AkzoNobel, the global paint and coatings giant, announced that it will cut 2,000 jobs worldwide by the end of 2025. This bold step is part of a larger restructuring effort aimed at reducing costs, improving operational efficiency, and preparing the company to weather market volatility. With approximately 35,700 employees across 150 countries, this represents over 5% of AkzoNobel’s total workforce, signalling a significant shift for the multinational.

Streamlining operations for survival
AkzoNobel, headquartered in Amsterdam, is a market leader in paints, coatings, and speciality chemicals, with household brands like Dulux and Sikkens under its belt. The company is under pressure to boost profitability amid rising labour costs and uncertain global economic conditions. The company’s CEO, Greg Poux-Guillaume, explained that this restructuring will streamline management and enhance decision-making speed, a necessary response to volatile markets. He emphasised that AkzoNobel aims to remain agile, adapting quickly to changing market conditions.

This move follows a broader trend of restructuring within AkzoNobel, including the closure of manufacturing sites in Ireland, Zambia, and parts of the Netherlands. These closures, coupled with job reductions, indicate a commitment to cutting operational costs in key areas. The job cuts will primarily affect managerial and administrative roles, but the company has yet to specify which regions will bear the brunt of the layoffs. In Belgium, for example, where 390 employees work across two major locations, the company has yet to confirm any direct impact.

Financial pressure and market realities
While AkzoNobel reported a €488 million profit on revenues of €10.7 billion in 2023, the company has faced increasing pressure from rising input costs and inflationary challenges. Poux-Guillaume reiterated that the restructuring aims to “accelerate profitable growth,” enabling the company to navigate economic headwinds and maintain its market position. The reduction of 2,000 jobs globally is seen as a necessary step in achieving these goals.

The restructuring will be completed by the end of 2025, giving the company time to engage in negotiations with local authorities and labour unions. AkzoNobel’s decision has raised concerns among workers, especially in regions where large numbers of employees are based, such as the Netherlands and Belgium. However, Poux-Guillaume indicated that the company would continue to engage with local works councils to address the impact on affected employees.

Expert insight: balancing profitability and workforce morale
Industry analysts have noted that AkzoNobel’s decision to cut 2,000 jobs reflects a balancing act between maintaining profitability and sustaining employee morale. While the company has shown profitability in recent years, it is clear that the restructuring aims to prepare the business for future challenges in a highly competitive global market. The ongoing rise in operational costs, particularly in regions with high labour costs, has forced AkzoNobel to make tough decisions to safeguard its future profitability.

The decision to focus cuts primarily on management and administrative roles suggests that the company is looking to eliminate redundancies and improve the speed of decision-making. However, this move also risks alienating key talent and affecting morale, particularly in regions where job security is already a concern. How AkzoNobel navigates these negotiations with unions and workers’ representatives in the coming months will be critical to its long-term success.