Oatly’s shares sour as alternative milk maker plans heavy job cuts

Oatly has unveiled a brutal plan to cut its workforce and axed its annual revenue forecasts, after posting wider than expected quarterly losses – causing its shares to plummet in today’s trading.

The plant-based milk group blamed its heavy downturn on lingering pandemic restrictions in Asia and production issues in the US.

The New York-listed company’s shares, which rose to a high of $29 after its initial public offering in 2021, were trading as low as $1.90 this morning.

The group also cited inflation, rising interest rates, changes in consumer behaviour, and unfavourable updates to foreign currency exchange rates.

It is now forecasting revenues of $700-720m, down from its earlier prediction of $800-830m.

Sales for the three months to September rose by seven per cent to $183m, but that was $28m short of consensus estimates.

Gross profit was $5m during the same period, down from $44.9m a year ago.

Meanwhile, the group recorded a net loss of $107.9m, or 18 cents a share, wider than the loss of $41.2m, or seven cents a share.

Toni Petersson, Oatly’s chief executive, recognised the figures were “below our expectations”.

The company, which employed about 1,280 people in 2021, announced it was targeting costs savings worth $25m annually through a “reorganisation” set to take place early next year.

It did not disclose the number of jobs that would be affected by “executing an overhead and headcount reduction”.

The company’s disappointing results Beyond Meat’s disappointing showing last month, where it reported a 22 per cent decline in sales and negative gross profit margins for the third quarter.