Unilever on Tuesday said it will cut around 1,500 management positions globally as part of an organisational overhaul to make it a simpler, more category-focused business.
The company will move away from its current matrix model and will be organised around five distinct business groups, the maker of Dove shampoo says in a press release.
The new categories are: 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, it says.
The restructuring 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, the company says, adding that these changes will be subject to consultation. “We do not expect factory teams to be impacted by these changes.”
“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,” says Alan Jope, CEO, Unilever. “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 five business groups will be aided by Unilever Business Operations, which will provide the technology, systems, and processes to drive operational excellence across the business.
This, Unilever says, will enable it to benefit from its scale and global capabilities.
The company also announced leadership changes as part of the new set-up. Nitin Paranjpe, chief operating officer (COO) at the firm, will take on a new role as chief transformation officer & chief people officer, leading the business transformation, and heading the HR function.
Unilever says its beauty & personal care president Sunny Jain has decided to leave the firm to set up an investment fund in technology megatrends. 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 says.
Some other leadership changes, which are effective from April 1, 2022, include: Fernando Fernandez, executive vice-president 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.
This comes at a time when Unilever’s India unit Hindustan Unilever (HUL) is battling an all-time high inflation, low volume growth, degrowth in rural markets, and distributors’ ire, Fortune India reported last week.
The latter's concern was the low margins they were getting in comparison to new-age distributors and wholesalers such as Udaan, Jumbotail, Metro Cash & Carry and Reliance Jio. Last month, HUL distributors had even stopped distributing their products until the management intervened and promised to give them a fair return on investment. "General trade is our most important channel and we will do all that it takes to take care of them," HUL chairman and MD, Sanjiv Mehta, said at the company's Q3FY22 earnings call.