Source | The Economic Times : By Kala Vijayraghavan,Sagar Malviya
MUMBAI: Hindustan UnileverBSE -0.08 % (HUL), India’s largest consumer goods company, plans to shed jobs as part of the Dutch parent’s global mandate to reduce costs across markets. While the extent of job cuts will be known by the end of April, senior executives privy to the development said it could be between 10% and 15%, including layoffs and reduction in new hiring.
The company employs 18,000 people across factories and offices in India, according to its 2015-16 annual report, including more than 1,500 managers.
The exercise is part of a business review that parent Unilever announced on Thursday, which includes exiting the spreads business of butter and margarine, increasing its margin targets and reviewing the dual structure of the Anglo-Dutch company, which exists as two separate entities in the UK and the Netherlands.
Global CEO Paul Polman committed to the board his strategy to cut costs sharply to protect profitability as it aims to prove that it can deliver growth following its rejection of a takeover attempt by rival Kraft Heinz for 115 billion pounds in February.
Analysts said the aggressive takeover attempt was a wake-up call for Unilever to slim down its portfolio and focus on profitability with cost-cutting efforts. Unilever is also combining its foods and refreshments units as part of the operations review.
“Unilever is conducting a comprehensive review of options available to accelerate delivery of value for the benefit of their shareholders,” an HUL spokesperson said. “The results of the review are expected later this month.”
The spokesperson said HUL doesn’t comment on market speculation.
“We have already started getting job applications from HUL,” said the CEO of a multinational consumer goods company.
Officials familiar with the development said while the Indian subsidiary is in a growth market and better placed than other units, Unilever’s business review would have a sharp effect across operations.