Job losses as Unilever set to reorganize business structure
The company said it will make it a simpler, more category-focused business.
The company will move away from its current matrix structure and will be organized around 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.
Alan Jope, CEO of Unilever, said, “Our new organizational 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.”
To enable Unilever to benefit from its scale and global capabilities, the five business groups will be supported by Unilever Business Operations, which will provide the technology, systems, and processes to drive operations across the business.
As a result of the new set-up, Unilever is making changes to its leadership team.
Fernando Fernandez, EVP Latin America, has been appointed president beauty & wellbeing, which includes hair care, skin care, as well as vitamins, minerals and supplements, and Unilever Prestige.
Fabian Garcia, President North America, has been appointed president personal care, responsible for skin cleansing, deodorants, and oral care.
Peter ter Kulve will continue in his role as president home care, responsible for fabric care, home & hygiene, and water & air.
Hanneke Faber, president foods & 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 appointed president ice cream.
The appointments are effective from April 1, 2022.
In addition, Nitin Paranjpe, chief operating officer, will take on a new role as chief transformation officer & chief people officer, leading the business transformation, and heading the HR function; while Reginaldo Ecclissato, chief supply chain officer, will lead the supply chain and Unilever Business Operations as chief business operations officer.
Sunny Jain, president beauty & personal care, has decided to leave Unilever to set up an investment fund in technology megatrends. Other members of the Unilever Leadership Executive (ULE) will remain in role, including Sanjiv Mehta who will retain executive leadership of Hindustan Unilever.
The proposed new organization model will result in a reduction in senior management roles of around 15% and more junior management roles by 5%, equivalent to around 1,500 roles globally. Changes will be subject to consultation. Unilever said it does not expect factory teams to be impacted by these changes.
Unilever said all costs related to setting up the new organization will be managed within existing restructuring investment plans.
Commenting on the announcement, Ramsey Baghdadi, consumer analyst at data and analytics company GlobalData, said, “Although Covid-19 restrictions have been alleviated in many countries, 45% of consumers are still concerned about the pandemic when visiting shops, according to a survey by GlobalData. Shop visitor numbers remain lower than pre-pandemic periods, and this is a direct barrier to a significant portion of Unilever’s portfolio that relies on impulse buys. No longer can the company be supported by boosts from panic buying. New product launches and specialized products will likely see less consumer engagement, and sales will ultimately slow.
“However, Unilever has been flexible before. It quickly recognized emerging consumer behaviors such as working from home, for example, and was just as quick to react, with the likes of innovative channel strategies such as direct-to-consumer.
“The company would benefit from focusing its attention on strengthening its current product ranges and reaching new and existing customers, instead of diversifying into other sectors such as healthcare—as seen in the GSK bid. If Unilever continues to implement forward-thinking investments, it will not need healthcare acquisitions to strengthen its portfolio.”