Consumer goods giant Unilever plans to cut 15% of its executive positions to speed up the company's decision-making, following increased pressure from activist investor Nelson Peltz.
Unilever CEO Alan Jope is conducting the largest layoffs since he took over as CEO three years ago. has cut about 1,500 positions, including cutting 5% of junior managers.
At the same time, the company is reorganizing the business into 5 divisions, including independent units such as ice cream production, beauty and personal care.
The company's shares fell 0.9% at 11:25 London time on Monday.
Unilever's share price has been under pressure in recent months as it struggles to boost sales. Analysts say the company has underperformed some rivals in areas such as hygiene and packaged food during the coronavirus pandemic and has not launched a major innovation for some time.
Jope is at a critical juncture, facing increasing pressure to chart a new course as the company's stock price lags that of rivals.
Earlier this week, Bloomberg reported, citing people familiar with the matter, that Trian Fund Management LP, a hedge fund managed by Nelson Peltz, had increased its stake in Unilever in the past few months, adding pressure on the company.
Royal Bank of Canada analyst James edwards Jones wrote:
"We still haven't heard what we wanted. The new operating model announced today may make the divestment easier, but we would rather they focus on putting The cost savings are reinvested in its brands and categories. There is no sign of any change in the company's culture, given that all the new division heads are current Unilever employees."
Unilever abandoned its plans for Ge last week. The acquisition of LansoSmithKline's health business was met with strong opposition from investors, and analysts pointed out that the company's other large acquisitions have subsequently achieved mixed results.
Critics say London-based Unilever will pay too much for the GlaxoSmithKline business and that its current focus should be on turning around existing businesses rather than launching new ones in areas where it has little experience.
Among the departing executives is former Amazon executive Sunny Jain, who succeeded Jope as president of Unilever's beauty and personal care division in 2019. Among Unilever's three major divisions, this business has been growing the slowest and will be split into two parts after the restructuring.
Unilever has also decided to split its food and snacks business into two separate entities, which will bring greater transparency to the performance of its ice cream business, which includes ice cream brands such as Ben Jerry's, Klondike and Magnum, Some analysts have speculated that the brands may be sold.
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