Under-pressure Unilever makes big changes to beauty management structure
Unilever, the UK-based consumer goods giant, is cutting some jobs and reorganising its structure as it comes under pressure from investors over its sluggish performance and some corporate missteps. Beauty & Personal Care chief Sunny Jain is also leaving the firm.
It will now be organised around five distinct business groups that include Beauty & Wellbeing and Personal Care. Each group will be fully responsible and accountable for its strategy, growth, and profit delivery.
Although it feels like a knee-jerk response to negative headlines in recent weeks, CEO Alan Jope said the 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. 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”.
There are also a number of key personnel changes as of the start of April within its beauty and personal care units. Fernando Fernandez, EVP 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, responsible for Skin Cleansing, Deodorants, and Oral Care.
Meanwhile, COO Nitin Paranjpe will take on a new role as Chief Transformation Officer & Chief People Officer, leading the business transformation, and heading the HR function. And Reginaldo Ecclissato, Chief Supply Chain Officer, will lead the Supply Chain and Unilever Business Operations as Chief Business Operations Officer.
Sunny Jain, current President Beauty & Personal Care, “has decided to leave Unilever to set up an investment fund in technology megatrends”.
But Sanjiv Mehta will retain executive leadership of Hindustan Unilever.
The overall reduction in senior management roles will be around 15% and more junior management roles by 5%, equivalent to around 1,500 roles globally.
The company is one of the biggest makers of personal care and beauty products globally. It owns the Dove brand, as well as Hourglass, Dermalogica, Paula's Choice and many more.
The news comes after big investors in the firm have become increasingly impatient over its slumbering results, an issue that has sent its share price downwards in recent months and more so in recent weeks.
This year one major investor criticised its ultra-ethical stance and said it had “lost the plot”. Then news emerged that it had attempted to buy GlaxoSmithKline’s soon-to-be-spun-off consumer healthcare arm for £50 billion. Its approach was rebuffed by GSK, but some investors thought the plan would distract Unilever from focusing on the goal of lifting sales and profits growth and were worried about an acquisition of that size.
And now it has also emerged that activist investor Nelson Peltz has acquired a stake in the firm. That news had sent the share price higher on Monday but mainly because other investors felt that the hedge fund would push for a big shake-up at the group.
It all leaves CEO Alan Jope in a difficult position but also raises fears that the firm’s eco and ethical goals could be compromised in any change of direction.
The firm is one of the most active on this front and aims to only market brands that have a "purpose" beyond simply selling products. Such a stance can dent profits if it means greater investments in things like eco ingredients and living wage levels. That's something major investors like pension funds tend to approve of. But it's also something that hedge funds often have little time for.
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