Restructuring

Our One Unilever approach

Our One Unilever programme has been streamlining our business and outsourcing parts of our information technology, human resources and finance functions. Since 2004, we have reduced our senior management headcount by around 40%.

In 2007 we accelerated our change programme by developing more 'multi-country organisations' (MCOs) – clusters of countries with a single centralised management. MCOs reduce duplication and free up resources to focus on customers and consumers. In Europe, for example, we consolidated our operations in Belgium and the Netherlands into one MCO and in Africa, we formed an MCO from operations in six countries. During 2008 we continued this process with further MCOs created in Asia, Africa, Europe and Latin America. As a result, the One Unilever programme – under which multiple business units are integrated into a single operating structure – became a reality across most of our key markets in 2008, bringing greater speed and simplicity to all our operations.

New R&D structure

We also announced a move to a One Unilever R&D structure in 2008 bringing our 6 000 plus R&D professionals together in one unified organisation. Geneviève Berger was appointed as our first Chief R&D Officer.

With an integrated global research, product development and implementation programme, the new structure aims to give us competitive advantage through greater efficiency and focus. This R&D organisation is designed to accelerate the delivery of ground-breaking advances, increase the focus on fewer, bigger innovations and optimise the balance between short- and long-term projects.

Divestments

During the year we also divested some parts of our business including our North American laundry business and Bertolli olive oil. We also sold our olive oil business in Turkey as well as our edible oil business in Côte d'Ivoire together with its interests in local oil palm plantations, Palmci and PHCI. At the same time we acquired a local soap business with a market presence throughout West Africa.

Outsourcing

We are outsourcing parts of our information technology, human resources (HR) and finance functions. Outsourcing provides a better service to our business and allows us to concentrate on our core activities.

We continue to work with Accenture to outsource HR support services. Accenture is now running core HR and recruitment services across many countries. Web-based learning was made available to an increased number of employees during 2008. We also rolled out a new web-based personal development planning (PDP) tool.

Responsible restructuring

The number of people we employ worldwide stayed constant between 2007 and 2008 at 174 000 as we acquired new businesses as well as continuing our restructuring programme. As a result of restructuring and a number of disposals, around 5 000 people left our business in 2008.

In implementing our restructuring programmes we always seek to uphold our values and treat people with respect, integrity and fairness, as embodied in our Corporate Purpose and Code of Business Principles. We follow agreed consultation processes. From employee consultation, we recognise that this level of organisational change is a source of concern and we take these concerns seriously. Thus our approach is to communicate regularly to ensure that people understand what is happening and where redundancy is necessary, to make every effort to help employees find alternative employment.

We seek to act in a socially responsible manner when we close plants or dispose of businesses. As a general principle, we aim to safeguard the interests of our employees. Disposal of a company is preferable to closure, but if closure is unavoidable, other mechanisms are used to mitigate the effects on employees. Depending on local legislation, culture and circumstances, we seek to consult on measures to manage these effects.

Changes to the business are inevitable in a competitive marketplace, so we invest in employees' life-long learning. Training and personal development focus on the continuous updating of skills each individual can use, whether inside or outside Unilever.

Some examples of our approach include:

India

In India, when we divested our tea estates business, we sold the business to three separate companies, each of whom is in the plantation/tea business. In each case, the acquisition helped them strengthen their business presence and performance. As part of the agreement with the new owners we explicitly covered the continuance of service of all these employees and the protection of their employment terms and conditions. Apart from normal attrition, no employees lost their jobs as a result of this transfer.

Romania

In March 2006, Unilever Romania announced the consolidation of three of its factories onto one site in Ploesti. Recognising that the closure of the factories in Targu Mures and Bucharest would have a significant impact on our employees and local communities, Unilever Romania was committed to treating people fairly throughout the process of change. As a result, all employees at the affected sites (127 in total) were offered jobs within our new operations at Ploesti. To compensate them for the move to a new town, they were offered a 'disturbance allowance', rent contributions for a year, a retention bonus and a commitment to career development within the new plant. Over a fifth of affected employees accepted this offer and agreed to move to Ploesti.

For those who chose not to move, Unilever Romania set up a programme, Orizont 2007 (Horizon 2007), to support them in finding new jobs. To implement Orizont 2007, we commissioned an external agency to provide training and support for employees for a period of six months. We set the agency challenging performance targets to ensure that genuine efforts were made to find new jobs for our employees. For example, each person should receive at least three attractive job offers and a total of 60% of those that sought help should be re-employed. The agency set up centres at both the affected factories, and delivered over 1 500 hours of training, including training for new skills such as crane driving and vehicle servicing. Over 90% of employees used these services, with a high success rate in finding new jobs.

South Africa

The closure of part of our Home and Personal Care (HPC) operations plant in Boksburg, South Africa meant that a large number of people were to lose their jobs. The process of change was managed carefully by working with the union and employees over a three-year period. Many employees were retrained and so were able to stay on as Unilever employees in other parts of our business. The people who did lose their jobs were placed into small businesses linked to our HPC operations, for example with a local packing business. To help with the transition, the Boksburg site provided training and financial support to these employees and businesses.

The Netherlands

Unilever closed three factories in the Netherlands in 2008. The closures affected Delft, Loosdrecht and Vlaardingen, resulting in just over 470 redundancies. Of these, 100 employees (‘Group of 100’) were given a later leaving date of April 2009.

Unilever organised training and outplacement to help those affected by redundancy find new employment. Just under 300 employees participated in our ‘Right Outplacement’ programme, while 60 were awarded a certificate recognising their competencies. From the Group of 100, half found new employment before April 2009.

*A further five employees retired

Please see related links for a case study highlighting some of the work we have been doing to help employees made redundant in Germany.