Unilever yesterday announced plans to cut around 1,500 management jobs worldwide under a major restructure of the British consumer goods giant.
The announcement comes after the maker of Magnum ice cream and Dove soap failed with a £50 billion takeover bid for the consumer healthcare unit owned by pharmaceutical groups GlaxoSmithKline and Pfizer.
Unilever said its “proposed new organisation model will result in a reduction in senior management roles of around 15 per cent”.
It added in a statement that junior management roles would be cut by five per cent.
Together the cuts totalled “around 1,500 roles globally”.
Unilever plans to create five distinct business groups: beauty and well-being, personal care, home care, nutrition and ice cream.
“Each business group will be fully responsible and accountable for their strategy, growth and profit delivery globally,” it said.
Chief executive Alan Jope, who has faced investor criticism over the recent failed takeover, added: “Growth remains our top priority and these changes will underpin our pursuit of this.”
Growth remains our top priority and these changes will underpin our pursuit of this
The group last week said it would not increase its offer for the GlaxoSmithKline-Pfizer unit.
That came after GSK said it had received three unsolicited offers from Unilever for GSK Consumer Healthcare − all of which were rejected for being too low.
CEO future in balance
“Unilever is under pressure from Nelson Pelz of Trian Partners, the activist investor who is growing a stake and is known for implementing aggressive turnaround strategies at Procter & Gamble and Mondelez,” Victoria Scholar, head of investment at Interactive Investor, noted.
“The company clearly needs to do some soul searching, focusing on ways to revitalise sales as Alan Jope's future as CEO hangs in the balance,” Scholar said.
She added however that Unilever's share price had “reclaimed all last week’s sharp declines following its disastrous” takeover bid.
Unilever recently agreed to sell its global tea business, including brands Lipton and PG Tips, for €4.5 billion to private equity group CVC Capital Partners.
And the multinational, whose products also include Cif surface cleaner and Marmite yeast spread, has enjoyed rising sales thanks to price hikes.
The world is experiencing strong inflation as economies reopen from pandemic lockdowns amid supply constraints and strong demand.
Costs of raw materials and energy are surging, while a number of sectors are impacted additionally by a need to pay higher wages as they struggle to find staff.