Unilever (UL) has announced that it is cutting 1,500 management positions in a restructuring that comes as an activist investor has built a stake in the British consumer goods company.
The maker of Dove soap and Magnum ice cream, which employs about 150,000 people worldwide, said the revamp would create five product-focused divisions - beauty and wellbeing, personal care, home care, nutrition, and ice cream.
The move, which Unilever said has been in the works over the past year, echoes the reshaping by arch-rival Procter & Gamble (PG) three years ago when it created six similar business units, in its biggest reorganization in decades.
Unilever, whose shares have fallen 13% over the past year, recently abandon plans to buy GlaxoSmithKline’s (GSK) consumer healthcare business for $67 billion U.S.
Its proposal, rejected by GSK, was widely criticized by investors as being a costly and risky distraction from dealing with pressing challenges to the business, such as surging inflation and weakness in healthy food sales.
Reports have also surfaced that activist investor Nelson Peltz has been building a stake in Unilever, mirroring a previous investment and push for change at Proctor & Gamble and other consumer goods companies.
Some investors think Unilever focuses too much on environmental and social issues and not enough on its core businesses, which, they claim, has hurt the share price.
On Thursday, influential British fund manager Terry Smith criticized Unilever in a public letter, calling the lost GSK deal a “near death experience” and urging the company’s management to focus on strengthening its financial performance.
Unilever, which traces its roots back to a small soap business in 1880s Britain, said it does not expect factory and unionized workers to be impacted by the latest restructuring.
