This FMCG giant is going to lay off thousands of employees, decision taken to reduce costs

FMCG sector giant Unilever is going to lay off thousands of employees across the world. Along with this decision, the company has also decided to separate the ice cream business. According to the company, employees from all over the world can be covered under the retrenchment. The company has informed that this decision is being taken to reduce costs and increase margins. This step of the company has received positive response from investors. The stock of the consumer goods sector company listed in London is trading with gains during the early trading of the European market.

What is Unilever’s decision?

The company has informed that the ice cream business will be separated as a standalone company. The process of separating the business will begin immediately and will be completed by the end of 2025. Along with this, the company has also announced layoff of 7500 employees. This number is 5.9 percent of the total number of employees of the company. This step has been taken to reduce costs in view of limited sales growth. According to Unilever, margins are expected to improve due to steps taken to separate businesses and reduce costs. The company has set a target of single digit sales growth. The company has informed with the decision that this cost reduction step will help it save about $ 87 crore in the next 3 years.

Company changed strategy

The company is currently changing its strategy. The new management had talked about focusing on simplifying its business. The previous management had increased the brand portfolio of the group to 400. However, in July last year, the new management had made it clear that the company would focus on only 30 products which account for 70 percent of sales. Under this restructuring plan, non-performing businesses are being separated.