Unilever cutting marketing staff by 12%, MacLeod moving south
December 06, 2013 | David Brown | Comments
This story was updated @ 9:34 on Dec. 6, 2010
Sharon MacLeod takes North American role amid larger shuffle
Unilever, one of the world’s most powerful packaged goods marketers, is cutting its global marketer workforce by 12%, reducing its SKUs by at least 30% and looking for other efficiencies in its ad budget.
The cuts were announced as part of the company’s Investor Seminar in London Thursday and reflect larger plans from Unilever CEO Paul Polman to boost margins by cutting costs.
Part of this approach appears to include a reshuffling of talent. Sharon MacLeod, Unilever’s vice-president of marketing in Canada, will become North American vice-president of personal care.
“I will be working out of our New Jersey office starting in January,” MacLeod said. “This is a newly created role as a part of bigger changes in Unilever that were announced today in the investor’s conference.”
Ricardo Martin, who currently operates out of New York as vice-president, deodorants for North America, will take over MacLeod’s role in January.
According to a report at AdAge.com, Unilever’s chief financial officer Jean-Marc Huet said the company will reduce its marketing spend by $470 million this year, in part through cuts to agency fees and production costs—what the company calls “non-working media.”
Pier Luigi Sigismondi, chief supply chain officer, said the company’s SKUs were down 20% this year and will drop by another 10% to 20% in 2014.
A presentation from chief marketing officer Keith Weed that was posted to the Unilever website includes a section on a “Simpler, leaner, more agile organisation.” In it, Weed said marketing headcount will be reduced by 12% and “non-working media” will drop to 24% of its ad budget this year from 32% in 2010. AdAge reports Weed’s goal is to reduce it even further to 20%.
Weed also said Unilever will also be less reliant on “regional hubs” and will be “able to remove quite a few regional people,” according to AdAge.
A request for comment about the impact on Unilever Canada was not immediately answered.
The moves aren’t that surprising in light of slowing growth for packaged goods in developed economies and a global retail environment under growing pressure, said Alan Middleton, assistant professor of marketing, Schulich School of Business, York University.
“Reviewing SKUs is a constant job,” he said. Marketers spend time building up global brands but eventually increase SKUs by introducing local variants. “After a period of doing this, they examine which are succeeding and which aren’t… It is a constant expand, review, reduce, expand,” he said. “Can it be planned better? Not really if the needed innovations are to be tried.”
The regional marketing operations follow similar cycles, he said, and cuts to marketing reflect cuts to local SKUs. “Unilever has a heritage of greater local autonomy than P&G for example, so there is probably more room for rationalization.”
In the short term it’s likely there will be less work for Canadian agencies, he said.
However the Canadian office and its agency partners might also view it as an opportunity to create international work. “The immediate impact may be negative, but it should be regarded as a challenge to produce effective global work.”
Originally published Dec. 5, 2013