Over the next three years, one in six jobs in Germany at the ailing agricultural and building materials group BayWa is to be cut as part of the restructuring process.

1,300 of a total of 8,000 full-time jobs at BayWa AG will be eliminated by 2027 according to the plans of chief reorganizer Michael Baur, as the company announced on Wednesday. The focus will be on the bloated headquarters in Munich, with administrative functions alone accounting for 40 percent of the cuts. BayWa only wants to give up 26 unprofitable out of 400 locations. "Discussions with the General Works Council on the planned personnel measures have begun and an agreement is being sought by the end of March 2025," the statement said.

Including the independent wind and solar project subsidiary BayWa r.e. and holdings abroad, more than 25,000 people work for the BayWa Group worldwide. However, Baur intends to part with "significant international holdings" in order to raise funds for debt repayment and the core business. Outside Germany, BayWa owns the New Zealand fruit trader T&G Global (formerly Turners & Growers) and the Dutch soy and grain trader Cefetra, among others. BayWa r.e. is also primarily active abroad.

"The BayWa of 2027 will be a focused, contemporary trading company with four core business areas: Agriculture, Building Materials, Energy and Agricultural Equipment," said Baur. "The prerequisite for BayWa being able to benefit from its leading market position in its focus markets again is that we position ourselves operationally competitively." Operationally, savings are to be made everywhere and processes improved. "This primarily includes streamlining administrative functions and transforming the IT area."

Under the aegis of long-standing CEO Klaus Josef Lutz, BayWa had grown into a global group and had accumulated a mountain of debt of more than five billion euros through acquisitions and investments in BayWa r.e.. After Lutz's departure, the company found itself in a liquidity crisis in the summer after interest rates rose and the core business came to a standstill.

Owners and banks have already injected around one billion euros in capital and bridging loans into BayWa to keep it liquid. Baur intends to secure further financing until 2027 by the end of the year. "BayWa AG's strong position in stable, socially relevant key markets and the trust of its financing partners enable it to restructure independently," the press release stated. A restructuring expert had certified that the company was fundamentally viable. A capital increase is also planned for next year, as BayWa announced at the weekend.

(Report by Alexander Hübner, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)