SINGAPORE: The closure of Oatly’s production plant in Senoko has resulted in significant job losses for local food and beverage company Yeo’s, which partnered with the Swedish drink firm. This decision, announced on 18 December 2024, affects a total of 59 workers, including 25 from Yeo’s and 34 directly from Oatly.
Job Reductions at Yeo’s
Yeo’s revealed that the retrenched workers were specifically hired to support Oatly’s operations, which began in October 2021 with the establishment of a S$30 million (US$22 million) plant. The company is working closely with the Food, Drinks and Allied Workers Union (FDAWU) to ensure fair compensation as per tripartite guidelines.
- 25 Yeo’s employees to be retrenched.
- 16 employees successfully reassigned to other roles.
- Severance packages based on salary and years of service will be provided.
Oatly’s Shift in Strategy
Oatly’s decision to close its Singapore facility is part of a broader strategy aimed at enhancing the company’s cost structure and reducing capital expenditures. CEO Jean-Christophe Flatin noted that while the Singapore plant will cease operations, their anticipated growth in the Asia-Pacific region will be supported by existing facilities in Europe.
Flatin expressed gratitude towards the Singapore team for their contributions, stating, “We expect that the action we are announcing today will capitalise on those collective improvements… while being efficient with our capital and costs.” The closure will involve significant restructuring costs and is expected to incur non-cash impairment charges estimated between US$20 million to US$25 million.
Future Support for Affected Employees
Oatly has committed to supporting all impacted staff with outplacement assistance and training to ease the transition. They are dedicated to treating the departing employees with respect and care, reflecting the company’s core values.