Unilever, the owner of popular household brands such as Marmite, Axe, Ben & Jerry's, and Dove, is planning to cut its global workforce in response to calls made by its shareholders. The company said it plans to cut thousands of management roles across its business units around the world.
Unilever currently has around 150,000 employees worldwide. A source familiar with the matter said the company is expected to cut its workforce in the "low thousands." Unilever has not officially commented on the reports of the job cuts.
The company and its CEO, Alan Jope, have been under increased pressure from shareholders for the past few months. U.S. activist investor Nelson Peltz and other shareholders have been calling on the company to work to revive its declining sales.
Peltz has reportedly been building a stake in the company through his hedge fund Trian Partners, which previously demanded reforms at Unilever's rival Procter & Gamble. It is not yet clear how much Peltz' had increased his position at the company, but the purchase of additional stakes boded well with investors, sending Unilever's stock up by 7.3% on Monday.
Jope previously led efforts to acquire GSK's consumer health business. However, the company's $67.2 billion offer was rejected, drawing anger from shareholders. GSK, which owns popular brands such as Advil and Sensodyne, said Unilever's offer had "fundamentally undervalued" its business unit.
Last week, Unilever announced that it was abandoning its bid. Unilever said it had sought to acquire the business unit to increase its stake in the personal healthcare and hygiene market to offset its declining sales in other segments.
Terry Smith, one of Unilever's top shareholders, slammed the failed acquisition. He described it as a "near-death experience" while also calling on management to focus more instead on the company's core business. Smith accused management of failing at its job at improving the company's business performance over the past few years.
Following the failed acquisition, Unilever unveiled a new strategy update to appease its angry stakeholders. The company assured investors that it was still capable of growing its profitable business units. Under the strategy, the company vowed to divest its less-profitable operations and focus more on its core health, beauty, and hygiene segments.
The planned job cuts are reportedly part of the new strategy, with the company stating that it would be performing a comprehensive review of its organizational structure. The company said it would be announcing a major initiative aimed at enhancing business performance within the month.
