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Unilever announces major changes in its organization, and it includes cutting 1,500 management jobs worldwide. The consumer goods company headquartered in London said on Tuesday, Jan. 25, that there will be changes to its organizational model to make it more simple and more focused on businesses of different categories.
Unilever explained it will move away from its current work structure and will be altered to form five distinct business groups. In the process, there will also be adjustments to their respective leadership team.
Furthermore, in its move to make its structure simpler, the business will be divided into five business units and these are personal care, nutrition, beauty and wellbeing, home care, and ice cream. Each of these units will have its own management team and president.
Unilever said that each division will be responsible for its own strategy, growth, and profit delivery worldwide. The company's chief added that this new system will help accelerate the company's decision-making process as well.
Then again, despite the good intention, CNN Business reported that the overhaul will also result in job cuts. The factory workers will not be affected but 15% of senior management roles and five percent of junior management roles are set to be axed globally and this is equivalent to around 1,500 jobs. Unilever currently has 149,000 employees around the world.
"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," Unilever's chief executive officer, Alan Jope, said in a press release. "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."
Meanwhile, Reuters reported that Unilever's announcement about its organizational overhaul comes just a few days after it was reported that investor Nelson Peltz of Trian Partners s building up a stake in the company. Unilever's shares also increased seven percent on Monday in London when the news of Peltz's interest came out.
