Unilever on Tuesday announced plans to cut about 1,500 management jobs worldwide in a major restructuring in the British consumer goods giant.
The overhaul aims to ease shareholders' concerns after a failed takeover bid and reports of an activist investor had a stake in the maker of Dove soap and Magnum ice cream.
Unilever, which employs about 149,000 people worldwide, said Tuesday the revamp would create five product-focused divisions – beauty and wellbeing, personal care, home care, nutrition and ice cream.
Unilever said that the move has been in the works over the past year echoes the reshaping by arch-rival Procter & Gamble (P&G) three years ago when it created six similar business units in its biggest reorganization two decades.
"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," Unilever CEO Alan Jope said.
Unilever, whose shares have fallen about 13% over the past year, last week effectively abandoned plans to buy GlaxoSmithKline's (GSK) consumer health care business for 50 billion pounds ($67 billion).
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 in emerging markets and weakness in healthy foods.
Days later, reports also emerged that activist investor Nelson Peltz's Trian Partners had been building a stake in Unilever, mirroring a previous investment and push for change at P&G and other consumer goods companies. Trian has not confirmed that it has built a stake in Unilever.
At P&G, Trian criticized the Tide detergent maker's falling market share, low organic sales growth, aging brands, bureaucracy and excessive structural costs, among other things.
"It just happens to be right now that Unilever is in the fray," Barclays analyst Warren Ackerman said. "Peltz has tried at Mondelez, Heinz, PepsiCo – a whole catalog of consumer goods companies."
Some investors think Unilever focuses too much on environmental and social strategies and not enough on its core business, he added.
On Thursday, influential British fund manager Terry Smith criticized Unilever in a letter to his Fundsmith LLP investors, calling the lost GSK deal a "near-death experience" and urging the company's management to focus on strengthening performance.
Smith criticized Unilever's "penchant for corporate gobbledegook as a substitute for effective action."
Unilever, which traces its roots to a small soap business in 1880s Britain, said it does not expect factory workers to be impacted by the restructuring.
