Unilever, which revealed a major move a week ago, has just announced its new organizational structure. In addition, the company also announced a series of high-level personnel appointments and some personnel optimization plans.

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boots hit the ground. Unilever , which revealed a major move a week ago, has just announced its new organizational structure.

According to Unilever’s latest announcement today, its latest restructured structure includes five business units: beauty and health, personal care, home care, nutrition and ice cream. In addition, the company also announced a series of high-level personnel appointments and some personnel optimization plans.

The company previously revealed that it "intends to transform from the existing matrix to an operating model that enables increased agility, improved category focus and enhanced accountability" following a comprehensive review of the company's organizational structure in order to achieve improved performance goals.

Unilever LOGO; Image source: Unilever

1. New architecture

Let’s take a look at the latest notification first.

Unilever said it will get rid of its current "matrix" structure and instead reorganize into five business units: beauty and health, personal care, home care, nutrition and ice cream. Each division will have full responsibility for its global strategy, growth and profits.

The company described the new structure as "simpler and more focused on category business."

Unilever logo; Image source: Unilever official website

Under this new structure, Unilever Business Operations will provide support to five business units, including technology, systems and processes. The streamlined Unilever Corporate Center will continue to be responsible for formulating the group's overall strategy.

Along with structural adjustments, Unilever also announced a series of personnel changes today.

• Fernando Fernandez, currently executive vice president of Latin America, has been appointed president of beauty and wellness, leading hair care, skin care, VMS (vitamins, minerals and supplements) and high-end beauty businesses.
• Fabian Garcia, currently president of North America, has been appointed president of personal care, responsible for skin cleansing, deodorant and oral care businesses.
• Peter ter Kulve will continue as President Home Care, responsible for the Fabric Care, Home & Hygiene and Water & Air businesses.
• Hanneke Faber, the current president of food and beverage, was appointed president of nutritional products. This department will be responsible for convenience cooking (Scratch Cooking), healthy snacks , functional nutrition, plant meat and diet planning.
• Matt Close, currently executive vice president of ice cream, has been appointed president of the ice cream business unit.

The above appointments are effective from April 1, 2022.

In addition, Nitin Paranjpe, the company's chief operating officer, will serve as the newly created chief transformation officer and chief people officer, leading business transformation and human resources. Chief Supply Chain Officer Reginaldo Ecclissato will be responsible for leading the supply chain department and Unilever's business operations as chief business operating officer.

Sunny Jain, currently president of the beauty and personal care division, has decided to leave Unilever. Other members of Unilever’s leadership will remain in place.

Commenting on this adjustment, Unilever CEO Alan Jope said: "Our new organizational model was developed last year and is designed to continue to improve performance. Adjusted to five category-focused business structures , will allow us to be more responsive to consumer and channel trends, with clear accountability for goal achievement. Growth remains our top priority, and these changes will support our pursuit of that goal."

Qiao Anlu ( Alan Jope); Image source: Unilever

Snack Dai noted that in addition to major structural and personnel changes, Unilever also revealed a personnel optimization plan. It said the proposed new organizational model would result in a reduction of about 15% in senior management positions and a 5% reduction in junior management positions, equivalent to about 1,500 positions being eliminated globally. Specific changes will depend on negotiations.

The company also emphasized that it does not expect factory teams to be affected.All costs associated with establishing the new structure will be managed within the existing restructuring investment plan.

2. Accelerate transformation

CEO Alan Jope, who has led the group since the beginning of 2019, is facing pressure to improve performance and share prices. Currently, Unilever's share price is at about the same level as five years ago, when Kraft Heinz launched an acquisition of Unilever.

Snack Dai previously introduced that Unilever "spoiled" more than a week ago that it would make adjustments to its organizational structure to achieve the purpose of improving performance.

Unilever stock price 5-year trend (Bloomberg); Image source: Unilever

On the one hand, Unilever has proposed a new strategic direction, which is to reposition its product portfolio into higher-growth categories and be substantial in the future. Sexually expanding its business in the health, beauty and hygiene sectors. “These categories offer higher sustainable market growth rates and significant opportunities to drive growth through investment and innovation, as well as leveraging Unilever’s strong presence in emerging markets,” the company explained.

Based on this, Unilever not long ago hoped to acquire GlaxoSmithKline consumer health products business, and even quoted a sky-high price of 50 billion pounds (approximately RMB 433.985 billion) in order to pursue a "strong strategy" point of fit”. However, there is still no progress in the deal, and after Unilever stated that it would not increase its offer, activist investors immediately increased their holdings.

Just a few days ago, people familiar with the matter told multiple foreign media that Trian Partners, an aggressive strategy hedge fund with a scale of up to $8.5 billion, had increased its holdings in Unilever, but it was unclear the details of Trian’s increase in holdings or the start time. . It is understood that Trian Partners has historically been known for carrying out streamlined corporate management reforms and obtaining large returns in the process.

Unilever's strategy has come under scrutiny after it ultimately gave up its pursuit of GlaxoSmithKline's consumer health business. Yesterday, Unilever's share price rose by more than 5% after opening.

On the other hand, in order to accelerate the improvement of operating performance, Unilever said that in addition to solving long-term strategic direction issues, it has been focusing on accelerating the growth of existing businesses and has implemented a series of initiatives to improve operating performance, including paying more attention to operational excellence and Improve market competitiveness and so on.

International public opinion is generally paying attention to Unilever’s latest official announcement today. Reuters pointed out that the move was to streamline the structure and respond to investors' concerns. It is worth noting that this announcement comes after activist investors already expressed an increase in their holdings in the world's second-largest personal care products manufacturer.

The Financial Times believes that Unilever’s CEO hopes to move quickly enough to quell the growing dissatisfaction of investors to prevent them from defecting to activist investors.

Bloomberg is concerned about personnel optimization, pointing out that Unilever’s CEO believes that many regional and business unit personnel are not conducive to rapid innovation, so they need to be cut to accelerate the company’s transformation.

Source of the cover image of this article: Unilever official website

For more first-hand information on personnel changes, follow the FoodTalks account and official website

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