British consumer goods giant Unilever on Tuesday announced plans to cut around 1,500 management jobs worldwide in a major restructure for the company, which recently saw a major acquisition bid fail.
The maker of Magnum ice cream and Dove soap said its “proposed new organisation model will result in a reduction in senior management roles of around 15%”.
It added in a statement that junior management roles would be cut by five percent.
Together the cuts totalled “around 1,500 roles globally”.
Chief executive Alan Jope, facing growing pressure from investor activists over his leadership, added: “Growth remains our top priority and these changes will underpin our pursuit of this.”
The announcement comes after Unilever failed in a £50-billion takeover bid for the consumer health care unit owned by pharmaceutical groups GlaxoSmithKline and Pfizer.
Unilever plans to create five distinct business groups — Beauty & Wellbeing, 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.
The group last week said it would not increase its offer for the GlaxoSmithKline-Pfizer unit.
GSK said it had received three unsolicited offers from Unilever for GSK Consumer Healthcare — all of which were rejected as 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 on Tuesday.
“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 euros 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.