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Under pressure, Unilever cuts 1,500 jobs and reorganizes
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Under pressure, Unilever cuts 1,500 jobs and reorganizes
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The food and hygiene products giant Unilever, under pressure from shareholders who are questioning its strategy after an abortive takeover attempt, unveiled a reorganization on Tuesday including the elimination of around 1,500 management positions.

The group now wants to organize itself “around five types of activity”: beauty and well-being, personal hygiene, home maintenance, nutrition and ice cream, the group said.

Each entity “will be fully responsible for its strategy, growth” and profits globally, notes the statement from Unilever, whose wide range of products includes Magnum ice cream, Cif cleansers and Dove soap.

This overhaul will result in “a reduction in management positions (…) which is equivalent to around 1,500 positions worldwide”, and should not have an impact on the workforce in the group’s factories, Unilever said, also announcing a series of appointments at the head of the new entities.

After having seen its action melt by 10% in two days on the London Stock Exchange at the start of last week when its title was already in sharp decline over one year, Unilever had given up on Wednesday to outbid its offer to 50 billion pounds on GSK Consumer Healthcare, deemed undervalued by the British laboratory.

But Tuesday’s announcement did not seem to convince the market: Unilever’s action on the London Stock Exchange, after starting a small rise, had started to fall again and lost 0.70% to 3,916 pence around 11:00 GMT.

Investors are “demanding more clarity on the direction being followed and Alan Jope is still under pressure to come up with a new strategy,” commented Susannah Streeter, analyst at Hargreaves Lansdown.

“The management team clearly wants to show that they are getting their house in order before embarking on a new buying spree, given how badly the offer (on the GSK entity) has been received”, she continued.

– “Wretched” performance –

The leader of the investment company Fundsmith, Terry Smith, an influential shareholder of Unilever, had in particular qualified at the end of the week the aborted project of acquisition of experience “nearly fatal” and considered “miserable” the performance of the group.

Since then, press reports have reported the rise in Unilever’s capital of the activist fund Trian Partners, of the American billionaire and financier Nelson Peltz.

“Surveillance (of the shareholders) is intensifying and there will be no shortage of arms to go and check whether the cleaning has been done in the underperforming corners of the company”, according to Susannah Streeter.

Especially since Nelson Peltz “is known for his implementation of aggressive recovery strategies at Procter & Gamble and Mondelez”, added Victoria Scholar, analyst at Interactive Investor, believing “that the future of its CEO Alan Jope is at stake. “.

Mr. Jope assured Tuesday that “growth remains our top priority” and that his new organization was already in the pipes before the failed takeover operation.

The new model “has been developed over the past year and aims to continue the acceleration we are seeing in our business performance”, he said.

Unilever explained last week that it wanted to advance “the repositioning of its portfolio (of products) towards high-growth categories”, specifying that “major acquisitions should be accompanied by the acceleration of the sale of brands and growth activities. weaker “.

In November, the group announced a 4.5 billion euro agreement with the CVC Capital Partners fund to sell it its tea division, which includes 34 brands including Lipton, Tazo and Pukka.

Unilever had recorded sales up 4% in the third quarter of 2021, boosted by price increases to offset sharply accelerating inflation.

Under pressure, Unilever cuts 1,500 jobs and reorganizes
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