PARIS — Danone SA expects a “local first” program will assist the company in generating cost savings of €1 billion ($1.19 billion) by 2023, the Paris-based company said Nov. 23. The cost reductions include eliminating 1,500 to 2,000 job positions.

Company executives spoke about moving to local control in an Oct. 19 conference call. Emmanuel Faber, chairman and chief executive officer, provided more detail on Nov. 23.

Under the strategy, local business units will regain autonomy, Mr. Faber said. Business entities within countries no longer will depend on a specific global category organization and instead will be unified in one single local business unit. Giving power back to countries will shorten the decision-making process, he said, giving the example of having two decision-making levels on capital expenditure compared to five today.

“This simplification and evolution in the role of our common functions will translate in reductions of around 1,500 to 2,000 positions in local and global headquarters, with up to 25% of current job positions for our global headquarters,” Mr. Faber said.

The local program will work hand in hand with a new integrated value chain organization announced on Oct. 19 that allows Danone to access new sources of productivity, including digitalization.

“Combined, these pillars of the plan will reinforce our ability to grow and also to generate recurring savings amounting to €1 billion by 2023, which will be partly reinvested in support of our growth and our brands but also to reenforce our margins,” Mr. Faber said.

The €1 billion in cost savings is expected to include €300 million ($357 million) from reduced costs of goods and €700 million ($833 million) related to general and administrative costs representing about a 20% reduction in overhead costs. Total one-off costs related to the new organization initiatives are expected to be about €1.4 billion for the 2021-23 period.

Danone on Oct. 19 reported third-quarter sales of €5.8 billion, which was down 9% from the same time of the previous year. Currency fluctuations accounted for 7% of the decline. Danone plans to return to profitable growth in less than a year while its recurring operating margin by 2022 should return to its pre-COVID-19 levels of more than 15%, Mr. Faber said on Nov. 23.

“This transformation is necessary because we are at this stage in the paradoxical situation where on one hand, our One Planet. One Health frame of action anchored in a portfolio of healthy and sustainable products and brands is even more relevant in today’s world, but on the other hand we are unable to fully reap the benefits of the current positive trends nor face in an optimal way their challenges,” he said. “Our recent results evidence this. We definitely need to reinvent ourselves, as a company, very much like all of us are doing it in our own ways of living, working or consuming.”