BayWa starts restructuring course: 1,300 jobs will be lost

This will mainly affect the central administration, which will lose around 40 percent of its jobs, as the company announced. Of the 400 or so locations, 26 are to be closed and foreign business is to be shrunk through the sale of “significant international holdings”. The target date for completing the renovation is the end of 2027.

At the end of 2023, the BayWa Group, including its subsidiaries, employed a good 23,000 people worldwide. The international workforce will also shrink due to the planned sales of parts of the group. The board did not disclose which “significant” holdings were for sale. The most important investments are BayWa re, which specializes in the planning and construction of green electricity power plants, the New Zealand apple producer Turners & Growers, the Dutch agricultural trading company Cefetra and a share in the Austrian Raiffeisen Ware Austria (RWA). Overall, BayWa, which is now represented in almost 60 countries, has several hundred subsidiaries and investments, as can be seen in the annual report.

BayWa is, among other things, the largest German agricultural trader; the group plays an important role in agriculture and food supply in the south and east of Germany. The company is burdened with billions of dollars in debt, the legacy of rapid expansion on credit over the past decade. Of the 8,000 full-time positions in the parent company BayWa AG, 6,700 are to be retained. Mathematically, this means that the company wants to cut over 16 percent of its workforce. According to the company, discussions with the general works council have begun and the board hopes to reach an agreement by the end of March 2025.

Heir to the former CEO

In fact, the restructuring program means that BayWa, which emerged from the cooperative movement, will largely reverse the loan-financed expansion that long-time CEO Klaus Josef Lutz orchestrated over the past decade. The current President of the Bavarian Association of Chambers of Industry and Commerce (BIHK) pushed through the conservative company’s entry into the renewable energy business despite considerable resistance. Lutz was always proud of his acquisition of the shares in Cefetra and Turners & Growers.

Lutz managed BayWa from 2008 to 2023. The short- and long-term financial debts ultimately totaled over 5 billion euros, around half of which were short-term – i.e. due within a year. The rapid increase in loan interest rates in the past two years, which Lutz and his board colleagues obviously did not take into account, put BayWa in trouble: interest payments to the banks tripled from 2021 to 2023 to 362 million euros, which is why the group posted a loss for the first time last year .

The poor global economy also hit BayWa; in the first nine months of this year alone, the net loss multiplied to a good 640 million euros. The planned sales are intended to reduce the mountain of debt and increase financial flexibility in daily business.

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