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Unilever Cutting 1,500 Management Jobs As Part Of Major Restructuring

Unilever has revealed plans to cut about 1,500 jobs globally as part of a significant overhaul of its management and structure. The move comes just days after its failed attempt to acquire GSK’s Consumer Health and reports an activist investor has built a stake in the underperforming business.

The plan will see Unilever move away from its current matrix structure and instead be organised around five product-focused divisions: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream. The company stated that each unit will be “fully responsible and accountable” for its strategy, growth, and profit delivery.

The group stressed that the plan had been developed over the past year and would not affect shopfloor jobs in its factories.

However, a simplification of the organisation will result in a reduction in senior management roles of around 15% and more junior management roles by 5%, equivalent to around 1,500 jobs globally. The firm employs about 149,000 people worldwide.

“Moving to five category-focused business groups will enable us to be more responsive to consumer and channel trends, with crystal-clear accountability for delivery,” said Unilever’s Chief Executive Alan Jope.

Amid increasing pressure to improve the group’s performance against its rivals, he added: “Growth remains our top priority and these changes will underpin our pursuit of this.”

The new structure will see the FMCG giant making several changes to its leadership team from April.

Fernando Fernandez, its current EVP Latin America, will take on the role of President of the new Beauty & Wellbeing unit, whilst Fabian Garcia, President North America, will lead the Personal Care division.

Peter ter Kulve will continue in his role as President Home Care, whilst Hanneke Faber, President Foods & Refreshment, has been appointed President of Nutrition. Matt Close, EVP Ice Cream, will become President of the Ice Cream group.

Other changes include the group’s current Chief Operating Officer, Nitin Paranjpe, taking on a new role as Chief Transformation Officer & Chief People Officer. Reginaldo Ecclissato, Chief Supply Chain Officer, will lead Unilever’s supply chain and business operations as Chief Business Operations Officer.

Meanwhile, Sunny Jain, the current President of Beauty & Personal Care, is leaving the company to set up an investment fund in technology megatrends.

Unilever shares slid over 10% last week after an overwhelmingly negative reception from investors and analysts to its £50bn approach for GSK’s Consumer Health business. Its pursuit was effectively ended with a statement saying the company would not raise its offer beyond the price which GSK had already rejected.

Unilever had defended its attempts to buy the GSK unit, calling it a “strong strategic fit” as it shifted the business towards faster-growing health, beauty, and hygiene products. Its plan included selling off lower-growth businesses, with several of its major food brands touted as potential disposals that could help pay for acquisitions.

Over the weekend, it emerged that activist investor Nelson Peltz’s Trian Partners had been building a stake in Unilever, mirroring a previous investment and push for change at Procter & Gamble and several other consumer goods companies.

NAM Implications:
  • Making bids often results in the bidder entering the spotlight…
  • …with potential activist shareholders emerging.
  • In which case their identity matters more than scale of shareholding.
  • Unilever knows what to expect from the new arrival…
  • With speed being key, disposals rise to the top of the agenda…
  • …and cutting the cost of 1,500 Management jobs should help.
  • Rivals spoiler alert: ‘Moving to five category-focused business groups will enable us to be more responsive to consumer and channel trends’
  • Meanwhile, opportunities for potential acquisition from a company in a hurry…
  • …and market share opportunities for rivals to a company thus distracted.