(Bloomberg) — Unilever Plc plans to cut 15% of its senior managerial positions to speed decision-making as activist investor Nelson Peltz puts more pressure on the consumer-goods giant.
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Alan Jope is making his biggest job cuts since becoming chief executive officer three years ago, eliminating about 1,500 positions as Unilever also reduces junior-management staff by 5%. The company is making ice cream, beauty and personal care independent units as it reorganizes its businesses into five groups. Last week, Unilever said it planned to announce the reorganization.
The shares traded 0.9% lower at 11:25 a.m. in London. Bloomberg earlier reported the company planned to reduce staff.
Jope is at a crucial juncture, coming under increasing pressure to chart a new course as the company’s share price lags rivals.
“We are still not hearing what we want,” Royal Bank of Canada analysts led by James Edwardes Jones wrote. “The new operating model announced today might make divestments easier, but we would prefer them to focus on reinvesting cost savings behind their brands and categories. There’s also no signs of any culture change yet given all new segment heads are Unilever incumbents.”
Among the departing senior managers is Sunny Jain, a former Amazon.com Inc. executive who replaced Jope as president of Unilever’s beauty and personal-care arm in 2019. That business, which has been growing at the slowest pace of Unilever’s three major divisions, is being broken up into two under the new organization.
Unilever’s decision to also separate its Foods and Refreshments business into two separate entities will bring more transparency to the performance of its ice-cream operations, which includes brands such as Ben & Jerry’s, Klondike and Magnum and has been speculated by some analysts as a potential disposal target.
Jope is seeking to reorganize the foods business around healthier habits, aiming to build a portfolio of plant-based meat and dairy alternative brands that will generate 1 billion euros worth of revenue by 2025. He also has expanded in the fast-growing vitamins, minerals and supplements space with the acquisition of Olly Nutrition in 2019.
Unilever last week abandoned its pursuit of GlaxoSmithKline Plc’s consumer-health business after the drugmaker rejected its overtures and investors disparaged the offer. Fund manager Terry Smith called the bid a “near-death experience.” Only days earlier, he had urged Unilever to focus more on fixing its own business than seeking to promote the sustainability ethos of brands such as Hellmann’s mayonnaise.
The company employs about 150,000 people globally.
Peltz’s Trian Fund Management has amassed a holding in Unilever over the past few months, people familiar with the situation said earlier this week. The exact size and Peltz’s intentions couldn’t be immediately learned.
(Updates shares in third paragraph)
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