Unilever, the Anglo-Dutch consumer goods giant behind brands like Dove, Ben & Jerry's, and Persil, has unveiled a sweeping restructuring plan. The company will inject several billion pounds into a radical overhaul of its operations. Management claims this will deliver a 20% boost in efficiency by 2027. But investors and unions are watching closely.
Chief Executive Hein Schumacher announced the plan on Tuesday. He described it as a “once-in-a-generation transformation.” The move comes after years of underperformance. Unilever's shares have lagged behind rivals like Nestlé and Procter & Gamble. The company now plans to streamline its supply chain, cut product lines, and slash jobs.
Insiders say the restructuring will cost around £3.5 billion over three years. That includes redundancy payments, factory closures, and new technology. The company will also merge its five business units into three. This is meant to reduce bureaucracy and speed up decision-making.
But the cost of change is high. Unions warned of “carnage” in the workforce. One senior union official, speaking on condition of anonymity, told The British Wire: “This is an attack on jobs. The board has lost touch with the people who make their products.” Unilever employs about 128,000 people globally. The company has not disclosed how many jobs will go, but analysts at Citi estimate up to 15,000 could be cut.
The efficiency gains are central to the plan. Schumacher wants to improve margins from 16% to 20% by 2027. That would bring Unilever closer to its peers. But some investors are sceptical. “We’ve heard this before,” said a fund manager who declined to be named. “Unilever has a history of bold promises and weak delivery. This time, they need to prove they can execute.”
The restructuring also involves a review of its portfolio. Unilever is expected to sell or spin off its slower-growing food division, which includes brands like Knorr and Hellmann’s. The focus will shift to higher-growth categories like beauty and hygiene. This mirrors a trend in the industry: PG&E recently spun off its snacks business. Nestlé has also streamlined.
But the plan is not without risks. The global economy is slowing. Inflation is squeezing consumers, who are trading down to cheaper brands. In emerging markets, competition from local players is fierce. Unilever’s own data shows volumes declining in key markets like India and Indonesia.
Schumacher remains bullish. In a memo to staff, he said: “We have to act now to secure our future. The world is changing fast, and we must change faster.” He also promised to invest in innovation and sustainability. But critics note that the company’s spending on R&D has fallen as a share of revenue over the past decade.
The reaction from the City has been mixed. Shares rose slightly on the day of the announcement, but have since fallen back. Analysts at Jefferies called the plan “ambitious but achievable”. They said: “The devil will be in the detail. Unilever must show it can cut costs without damaging its brands.”
For now, the company is pressing ahead. The restructuring will begin in earnest next quarter. Factories in the UK, US, and Asia are under review. Staff at Unilever’s London headquarters are braced for further redundancies. The coming months will be tense.
One thing is clear: Unilever is betting big. Whether this bet pays off will determine not just the company’s fate, but also the careers of thousands of its employees. The British Wire will continue to follow this story.
