Unilever wields cleaver to Euro workforce

By Neil Merrett

- Last updated on GMT

Related tags Cream cheese Profit

Unilever's European workforce will bear the brunt of the company's
proposed 20,000 job cuts over the next four years, a company
spokesperson said today.

Group spokesperson Tanno Massar told DairyReporter.com that 10,000 to 12,000 job reductions will occur at the company's European operations. The cuts will include workforce reductions resulting from divestments of the group's operations, he added. Massar was unable to detail further specifics regarding which operations or countries are to be affected by the cuts, though he confirmed that French cheese producer Boursin will be divested as part of the focus. The announcement was made as the group attempts to cut €1.5bn out of its costs throughout its global operations. The plan includes focusing on a more narrow range of products, both in the food, and home and personal care divisions. The Boursin cheese unit, based in the French town of Pacy, employs 150 people for the production of cream cheeses. While the Boursin remains profitable, Massar added that products like cheese were not part of the company's future plans for growth in its operations. "Although Boursin is performing well, with good growth and profitability, cheese is not a core category for Unilever,"​ he stated. "We believe Boursin could have an even better future outside our company."​ Massar said that further offloading of units like Boursin could be expected in the future. In August, the group announced its intention to cut 20,000 jobs, accounting for 11 per cent of its total workforce, as part of a new "aggressive"​ growth strategy for its operations. Through the strategy, the company plans to streamline its operations by making €1.5bn worth of cost cuts in a bid to lift it operating margins to above 15 per cent by 2010, the company stated. Unilever expects to make the job cuts through the sale of some of its operations and brands, such as its North American laundry segment. The company expects to make €2bn worth of divestments, with its slower performing divisions facing the possibility of being cut from the business. The cuts were announced following stagnant profit growth for the group during the first six months of the current fiscal year. Expressed in current rates, operating profit was down by 4 per cent, though were unchanged on a like-for-like basis at €2.74bn for the period ending 30 June. However, operating margins improved by 0.3 percentage points to 13.7 per cent before the effects of restructuring. In July, plans to restructure the groups management were also announced, with about a 50 per cent reduction in the number of roles. This focus will be extended to changes within its sales structure and a reduction in its offices to a single site in Surrey, England by 2008.

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