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Unilever to slash 1,500 jobs in major organisational restructuring

Moneycontrol logo Moneycontrol 25-01-2022 Devika Singh
a sign in front of a window: Unilever to slash 1,500 jobs in major organisational restructuring © AFP Unilever to slash 1,500 jobs in major organisational restructuring

Unilever on January 25 announced a major organisational restructuring, which will impact several senior and junior management roles in the organisation.

The proposed new organisation model will result in a reduction of 15 percent in senior management roles while the junior management roles will be trimmed by 5 percent, equivalent to around 1,500 roles globally, the company informed in a press statement.

Under the new structure, the company will move away from its current matrix structure and will be organised around five distinct business groups – beauty and 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, the company said.

Leadership changes

As a result of the new set-up, Unilever is making changes to its leadership team, which includes the reappointment of former Hindustan Unilever (HUL) CEO Nitin Paranjpe, Chief Operating Officer (COO), as Chief Transformation Officer and Chief People Officer.

Paranjpe, the company said, will lead the business transformation, and head the HR function now. The executive was CEO of Unilever's Indian unit HUL and served as Executive Vice President for the South Asia region from 2008-2013.  In 2013, he was appointed President of home care business at Unilever and then President of food and refreshments in 2018. Paranjpe in 2018, also became a member of the Unilever Leadership Executive and COO of the company in 2019.

Sunny Jain, President, beauty and personal care, has decided to leave Unilever to set up an investment fund in technology megatrends, the company said. Jain had joined Unilever in 2019 and was part of the Unilever Leadership Executive.

“Other members of the Unilever Leadership Executive (ULE) will remain in the role, including Sanjiv Mehta who will retain executive leadership of Hindustan Unilever,” it added.

In other major leadership changes, Fernando Fernandez, EVP, Latin America, has been appointed President, beauty and wellbeing, which includes hair care, skincare, as well as vitamins, minerals and supplements, and Unilever Prestige and Fabian Garcia, President, North America, has been appointed President - personal care. Garcia will be responsible for skin cleansing, deodorants, and oral care.

Hanneke Faber, President, foods and refreshment, has been appointed President, nutrition, which will be home to scratch cooking, healthy snacking, functional nutrition, plant-based meat, and food solutions.

Matt Close, EVP, ice cream, has been redesignated as President, ice cream, a business group in its own right, according to the company.

Peter ter Kulve, the company said, will continue in his role as President, home care, responsible for fabric care, home and hygiene, and water and air.

These appointments are effective from April 1, 2022.

The new structure

Unilever said its five business groups will be supported by Unilever Business Operations, which will provide the technology, systems, and processes to drive operational excellence across the business. “A lean Unilever Corporate Centre will continue to set Unilever’s overall strategy,” said the company.

Alan Jope, CEO, Unilever, explained, “Our new organisational model has been developed over the last year and is designed to continue the step-up we are seeing in the performance of our business. 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. Growth remains our top priority and these changes will underpin our pursuit of this.

The move by the parent company could work in favour of the Indian unit, indicate analysts. "While it is difficult to quantify or point out specific benefits for HUL, the category-focused business groups could give faster access to global product portfolio, help in sharing of best practices, and possibly result in quicker decision making. Also, the big focus on growth is positive for the Indian unit as HUL has gained the highest year-on-year market share in a decade," said Abneesh Roy, Executive Director of institutional equities at Edelweiss Securities.

Unilever’s move to changes its structure and leadership team follows a significant stake acquisition by Trian Partners, Nelson Peltz's activist hedge fund, as reported by Reuters earlier this week. According to reports, the hedge fund, known for pushing big firms such as General Electric, Mondelez and Procter & Gamble to improve and simplify their operations, has been pressuring Unilever as well. Trian Partner’s had called for changes in another consumer goods firm Procter & Gamble in 2018 and won the battle.

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