(For educational purposes only)

Tuesday February 22 6:36 AM ET

Unilever To Lay Off 25,000 Workers

By ANTHONY DEUTSCH Associated Press Writer

ROTTERDAM, Netherlands (AP) - Anglo-Dutch consumer products giant Unilever said today it will lay off 25,000 employees, or 10 percent of its global workforce, as part of a sweeping restructuring.

The company made the announcement as it released year-end 1999 earnings that showed a 5 percent drop in net profit.

The company said the layoffs would be made over the next five years, mainly in Europe and the Americas, as it closes 100 of its 250 production sites in a move to regroup its manufacturing operations into regional networks.

Unilever is known for a wide array of household name products including Lipton teas, Calvin Klein fragrances, Dove soap, Close-Up toothpaste and Breyer's ice cream. It said its 1999 net profit slipped to $2.97 billion, down from $3.28 billion in 1998.

Late last year, Unilever disclosed that it would focus on 400 of its current 1,800 brands. Today, it said it will invest $1.5 billion to market that smaller product lineup over the next five years.

Unilever said the restructuring would cost an estimated $5 billion.

Antony Burgmans, chairman of Unilever's Dutch arm, said in a statement he expects net earnings per share to grow between 8 percent and 10 percent, before exceptional items, in 2000. He said improved conditions in emerging markets, Western Europe and North America will be the driving force behind the growth.

In the past year, Unilever posted an increase in operating profits and margins in all regions but Latin America, where ``difficult economic conditions'' and tougher competition in the laundry market hurt results, Burgmans said. Unilever is one of the world's largest manufacturers of laundry detergent.

The company said it will also invest $200 million this year to expand its Internet business activities, and plans to start a Web site over the next two years where consumers can buy the company's products. It said more investment in e-business could be expected beyond the year 2000.

Burgmans said Unilever would ``continue to look aggressively for value-adding acquisitions and alliances that will further consolidate and reshape our industries.''

The company's shares jumped 6.3 percent to $48.95 in early trading on the Amsterdam stock exchange. Unilever employs 250,000 people worldwide.

-- Spoonfed (Spoonfed@spoonfedd.xcom), February 23, 2000

Answers

Burgmans expects earnings this year to increase 8 - 10 per cent net. That would be back to 1998 levels if there were no "exceptional items."

How many other manufacturing companies are in the same boat, wishing for the levels of profit of yesteryear?

-- Tom Beckner (becknert@xout.erols.com), February 23, 2000.

And how accurate are Unilever's financials? If the shortfall is real how much of it was due to small, easily fixed in 2 or 3 hours computer problems, tiny problems in subsidieries and trading partners.

We've seen banks misplace billions of dollars for a year, inaccurate credit card bills, snarled production systems. Now 25,000 hardworking employees are given the old heave-ho because some numbers aren't high enough but oh, by the way, we have more billions to spend on the pointy-haired manager's big ideas.

Let's keep people employed, retrain them, reassign them, show them motivational posters and give them pep-talks... well, maybe we can skip the pep-talks.

-- cory (kiyoinc@ibm.XOUT.net), February 23, 2000.

Nice to hear from you cory, totally agree

they should sack the management whose responsibility it is for getting in this situation

why can't they keep a reasonably lean/mean efficient operation running to ride the good times and the bad, constantly look at ways of improvement rather than having drastic "restructuring" exercises every so often which in themselves cost a packet the usual trick is to get rid of the over 50s so whats gonna happen to them when they hit the big 50

-- Sir Richard (richard.dale@unum.co.uk), February 23, 2000.