Under-fire Unilever culls 1,500 management jobs as reshapes By Reuters
© Reuters. FILE PHOTO: Unilever logo is displayed in this illustration taken on January 17, 2022. REUTERS/Dado Ruvic/Illustration
By Richa Naidu and Pushkala Aripaka
LONDON (Reuters) -Unilever unveiled plans on Tuesday to cut about 1,500 management jobs in a restructuring aimed at easing shareholders’ concerns after a failed takeover bid and reports an activist investor had built a stake in the consumer goods giant.
The maker of Dove soap and Magnum ice cream, which employs about 149,000 people worldwide, said on Tuesday the revamp would create five product-focused divisions – beauty and wellbeing, personal care, home care, nutrition, and ice cream.
The move, which Unilever (NYSE:) said has been in the works over the past year, echoes the reshaping by arch-rival Procter & Gamble (NYSE:) (P&G) three years ago https://www.reuters.com/article/us-procter-gamble-strategy-idUKKCN1ND37M when it created six similar business units, in its biggest reorganisation in two decades.
“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,” Unilever CEO Alan Jope said.
Unilever, whose shares have fallen about 13% over the past year, last week effectively abandon https://www.reuters.com/business/retail-consumer/unilever-says-it-will-not-increase-50-bln-pound-offer-gsk-consumer-business-2022-01-19ed plans to buy GlaxoSmithKline’s (NYSE:) consumer healthcare business for 50 billion pounds ($67 billion).
Its proposal, rejected by GSK, was widely criticised by investors as being a costly and risky distraction from dealing with pressing challenges to the business, such as surging inflation in emerging markets and weakness in healthy foods.
Days later, reports also emerged activist investor Nelson Peltz’s Trian Partners had been building a stake in Unilever, mirroring a previous investment and push for change at P&G and other consumer goods companies. Trian has not confirmed that it has built a stake in Unilever.
At P&G, Trian criticized the Tide detergent maker’s falling market share, low organic sales growth, aging brands, bureaucracy and excessive structural costs, among other things.
“It just happens to be right now that Unilever is in the fray,” Barclays (LON:) analyst Warren Ackerman said. “Peltz has tried at Mondelez (NASDAQ:), Heinz, PepsiCo (NASDAQ:) – a whole catalogue of consumer goods companies.”
Some investors think Unilever focuses too much on environmental and social strategies and not enough on its core business, he added.
On Thursday, influential British fund manager Terry Smith criticised Unilever in a letter to his Fundsmith LLP investors, calling the lost GSK deal a “near death experience” and urging the company’s management to focus on strengthening performance.
Smith criticised Unilever’s “penchant for corporate gobbledegook as substitute for effective action.”
Unilever, which traces its roots to a small soap business in 1880s Britain, said it does not expect factory workers to be impacted by the restructuring.
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