With an organisational realignment, BASF is creating the conditions for greater customer proximity, increased competitiveness and more profitable growth. BASF is streamlining its administration, sharpening the roles of services and regions and simplifying procedures and processes. As a result, the company expects savings of €300 million, as part of the ongoing excellence program, which is anticipated to contribute €2 billion to earnings annually from the end of 2021 onwards.
In the course of the strategy implementation, BASF expects a reduction of a total of around 6,000 positions worldwide until the end of 2021, a decrease that results from the organisational simplification and from efficiency gains in administration and services as well as in the operating divisions. In addition, central structures are being streamlined in the context of the announced portfolio changes. BASF will continue to need additional employees in fields like production or digitalisation, depending on future growth rates.
“We will set up the new organisation with a clear focus on leveraging synergies, reducing interfaces and enabling flexibility and creativity,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF. “We want our customers to experience a new BASF, and to achieve this, we have to live a new BASF. We will therefore continue to develop our organisation to work more effectively and efficiently and in this way, we will ensure the success of our customers, strengthen our competitiveness, and grow profitably as a company.”
In a clear separation of steering and governance from services, customer-focused operating divisions, service units and regions as well as a lean Corporate Centre are the cornerstones of BASF’s new organisation. The Corporate Centre will consist of less than 1,000 employees and will support BASF’s Board of Executive Directors in steering the company as a whole. This includes central responsibilities, among others in the areas of strategy, finance, legal, human resources and communications.
In addition, around 29,000 employees will be working in cross-functional service units. “Global Engineering Services” and “Global Digital Services” will in future offer their services either for individual sites or globally for business units of the BASF Group, “Global Procurement” will make purchasing even more effective.
A new unit to be led by Marc Ehrhardt, currently head of the Finance division, “Global Business Services”, will be newly established and will form a worldwide network of about 8,000 employees providing end-to-end services and will support the business units with services from the areas of finance, human resources, communications and supply chain.
The role of regions and countries is being sharpened and represent BASF locally and support the growth of business units with local proximity to customers.
The first changes will take effect on January 1, 2020.