Fonterra may be set to shed hundreds of positions in a review of its management structure.

Source: 1 NEWS

The cooperative is struggling against a slump in dairy prices and Fonterra chief executive Theo Spierings said the review would be all-encompassing.

Everything from procurement, working capital and cost savings would be looked at and the review would likely be completed in August, but it was not clear when job losses would take place.

Mr Spierings spoke to Radio New Zealand this afternoon, saying the company needed to "trim the sails because the weather is rough".

"Do we have to review whether we have too many support functions and possibly not enough people in market? Yes. That's what we're reviewing right now.

"It's a shift of people and capabilities."

It was understood the Auckland office was likely to bear the majority of the losses.

Prime Minister John Key said the company needed to prove to its shareholders that it was making changes in the face of tough conditions.

"Probably given the reduction in the payout and the impact that that's going to have, they need to demonstrate to their owners, which are effectively the farmers of New Zealanders, that they are cutting their own costs," he said.