consumer goods manufacturer
Henkel is cutting 2,000 jobs worldwide
Henkel factory premises in Düsseldorf. Photo: Jan-Philipp Strobel/dpa
© dpa-infocom GmbH
The consumer goods group is reorganizing its consumer business because it wants to become more competitive. Thousands of jobs are to be saved by the end of 2023. And another round of job cuts has already been announced.
The consumer goods manufacturer Henkel wants to cut around 2,000 jobs worldwide by the end of 2023. Mainly positions in sales and administration are affected, said CEO Carsten Knobel on Thursday in Düsseldorf.
At the same time, the company behind brands such as Persil, Schwarzkopf and Pritt announced further job cuts for the following years. The company did not provide any information on how many jobs in Germany will be affected by the job cuts. However, the manager emphasized: “Our clear goal is to rule out redundancies.”
The job cuts are a consequence of the merger of the previously separate corporate divisions of beauty care and detergents and cleaning products, which was announced in January. By bundling the consumer business, which generates around ten billion euros in sales, Henkel is not only hoping for savings in the hundreds of millions, but also for more growth. The adhesives business, the largest division, is not affected by the restructuring.
Henkel currently employs more than 20,000 people worldwide in the consumer goods business, around 3,000 of them in Germany. In the first step of the merger, the sales and administration structures in particular are to be streamlined by the end of 2023. In a second phase, the structures in production and logistics are to be optimized. Here, too, there will be job cuts, said Knobel. However, no information can be given about the magnitude.
However, Henkel does not only want to streamline the corporate structures in the consumer business. The brand portfolio is also to be thinned out again in this area. The manager says that shops and brands with a total turnover of up to one billion euros are currently being examined to see whether it makes sense to sell them or to close them down.
Savings of around 500 million euros are expected
Henkel is hoping for savings of around EUR 500 million in the medium term from the merger of the detergents, cleaning agents and cosmetics businesses. The synergies should primarily result from the improvement of sales and administration structures, in production and logistics as well as in advertising and marketing. Henkel put the one-time expenses for the restructuring of the group at 350 million euros for the first phase.
Just a few days ago, Henkel lowered its earnings forecast for the current year due to higher raw material and logistics costs and the effects of the war in Ukraine. The company decided to withdraw from Russia and Belarus after Russia attacked Ukraine. According to the information, this affects annual sales totaling around one billion euros. In addition, drastic increases in prices for direct materials and logistics would have a greater impact on earnings development than previously expected.
Henkel’s General Works Council Chairwoman Birgit Helten-Kindlein demanded that the reorganization of the consumer goods business must take Henkel forward strategically and not just list synergy potential and cutbacks. “The group still has to improve on that.” The company still owes too many details about where and on what grounds so many jobs should be lost. “The adjustments must not only be carried out in a socially acceptable manner, they must also not lead to an additional burden on other parts of the workforce,” she demanded.