Unilever announces plans to axe 1,500 jobs globally
Unilever, the consumer goods giant, has announced plans to cut an estimated 1,500 jobs from its global workforce.
This is around 5% of the company’s total workforce, but Unilever has said the move will not affect shopfloor jobs in factories.
Reportedly, the firm behind Marmite is under pressure after a failed £50bn bid for a division of GlaxoSmithKline. Reports also suggest shareholders are demanding changes.
Unilever has more than 6,000 employees based in the UK and Ireland, and according to Chief Executive Alan Jope, the announcement to cut jobs is part of a structural overhaul, the plans for which have been underway for months now.
Under the new plans, Unilever will be organised around five divisions, which includes beauty, personal care and ice cream. Senior executive changes and cuts further down the management chain are also expected.
Commenting on Unilever’s announcement, Susannah Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown, said: “Alan Jope is attempting to show he’s wielding a new broom at the top of Unilever as a spring clean of the business gets underway with 1500 management jobs set to be swept away.
“Instead of enlarging its cupboard of consumer staples, the focus is on clearing away layers in the existing business, in an attempt to boost profit margins. With activist investor Nelson Peltz having built up a bigger stake in the firm, scrutiny is ratcheting up, and there will be no shortage of fingers itching to check whether the dust really has been cleaned out of underperforming corners of the business.
“The management team clearly wants to show they are getting the house in order before embarking on another shopping spree, given how badly the bid was received. Shares rose initially on news of the clear out, but have lost ground, with some investors not satisfied that cost cutting alone will be enough to ensure Unilever turns a corner.
“Customer loyalty is still a big asset for Unilever, and it’s been working to build a volume-led business, but with the cost of living squeeze intensifying, there is a risk pricier products will struggle to shift. So clearly, more clarity is being demanded about the direction ahead, and Alan Jope is still under pressure to come up with a brand new strategy.”