Unilever, the consumer products giant, is to cut 25,000 jobs and close 100 plants in Europe and North America as part of ambitious plans to increase growth and profitability.
The programme, announced yesterday, will overhaul the Anglo-Dutch group's supply chain to focus manufacturing on 150 key sites and 130 ancillary locations, releasing savings of £1 billion sterling (€1.6 billion) a year by 2004, at a cost of £3.3 billion.
Unilever employs about 1,000 workers at its three Irish subsidiaries. A company spokeswoman in Dublin said yesterday she was unable to give any indication at this stage about the implications of the cutbacks for Irish jobs.
"This is a worldwide five-year programme," she said. "No final decisions have yet been taken as to which plants will be affected," adding that the firm would reveal its plans when the "proper consultation processes" were complete.
About 650 people work at the group's Van den Bergh Foods division, the activities of which include manufacturing and marketing the Lyons tea, Flora margarine, HB ice cream and Bird's Eye frozen food brands.
Its cleaning products division, Lever Faberge, employs 150 workers involved in marketing and distributing products such as Dove soap and Persil washing powder. A further 100 people work for Unilever's industrial cleaning business, Diversey Lever, which manages detergents for laundries and hygiene products for factories.
Unilever said that, as part of the rationalisation programme, a global e-procurement system will move a large part of the company's supply purchasing online, producing lower costs and simpler procedures.
Some of the resulting savings will be used to boost sales of Unilever's 400 leading brands, such as Dove skincare products, Lipton tea, Omo and Skip detergents and Calvin Klein cosmetics.
The aim is to increase sales by 5 per cent per year and increase profit margins from 11 per cent to 15 per cent in the next five years.
The announcement came after a year in which the Unilever share price almost halved, with investors deserting consumer shares in favour of higher-growth Internet, media and telecommunications companies.
Mr Niall FitzGerald, chairman of Unilever's British arm, said the changes were a continuation of the transformation of the company into a group focused on a narrower range of consumer brands.
"The challenge is to generate value of £20 billion over the next five years, which in time will be reflected in real and sustained growth in the share price and shareholder value," he said.
The growth targets are in contrast to Unilever's recent performance, which has seen flat sales year-on-year across the group. Last year, turnover was flat at £27 billion and pre-tax profits were down 7 per cent to £2.86 billion, compared with £3.09 billion in 1998, a figure which was boosted by disposals.
Analysts gave a cautious welcome to yesterday's announcement. "They can achieve these targets, but this hangs on further significant changes within the organisation," said one.
In Europe, which with North America will face the bulk of the job cuts, turnover was down 1 per cent; in North America, growth was flat at 1 per cent. "They have too many assets in Europe," said one analyst. "They have to shrink the asset base."
Changes are also taking place at the top of the group. The chairman of Hindustan Lever, the group's Indian subsidiary, is to become a Unilever director in May, and Lord Brittan, former vice-president of the European Commission, will become an advisory director.
The company may also axe its under-performing European bakery division, which will be divested by the end of the year if it fails to meet targets.
Elizabeth Arden, the fragrance and cosmetics business, which is in the throes of a restructure, is also in the firing line. However, Mr FitzGerald said he had been encouraged by the recent performance of the business.
Unilever shares yesterday rose 5p to 391p in London and Fl1.65 to Fl47.66 in Amsterdam.
