The consumer goods group wants to cut 300 jobs in Germany.
Dusseldorf As part of its corporate restructuring, Henkel plans to cut 300 jobs in Germany. This was announced by CEO Carsten Knobel in an interview with the “Rheinische Post”. This is the first time that the Persil manufacturer has commented specifically on the extent of the job cuts in the home market.
Henkel announced in spring that it wanted to cut 2,000 jobs worldwide by the end of 2023. The background is the reorganization of the consumer goods divisions into the new business unit “Consumer Brands”. CEO Knobel wants to merge the ailing cosmetics business (“Dial”, “Syoss”) with the better-performing detergents and cleaning agents sector and its well-known brands such as Persil and Pril.
The group employs 20,000 people worldwide in the two affected divisions, 3,000 of them in Germany. Around a tenth of employees worldwide and in Germany are affected by job cuts. Overall, Henkel has more than 52,000 employees.
In the interview, CEO Knobel reiterated that he wanted to avoid redundancies. Instead, affected employees should be discussed about other positions in the company, and arrangements for early retirement are also conceivable.
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Most of the jobs are to be eliminated in administration and management. Henkel initially occupied the top positions in the new division; now the company is going through every management level to make personnel decisions, says Knobel.
Further job cuts after 2023
Henkel will not stop at the initial 2,000 jobs. In the period after 2023, further positions are to be eliminated, especially in the areas of production and supply chain. Details are not yet known.
Read more: Henkel expects less profit – costs increase by two billion euros, share collapses
With the restructuring of the group and the job cuts, Knobel is reacting to the problems of the cosmetics division, which has been weakening for years. Analysts had repeatedly criticized that the business was too small and not profitable enough compared to competitors like L’Oréal.
Henkel is primarily active in the mass consumer goods business. The margins here are lower than for luxury products or high-quality skin creams, which Henkel does not offer.
With the restructuring of the group, Knobel hopes to make more consistent portfolio decisions. “This makes it easier for us to part with brands that do not meet our expectations in terms of gross margin, sales growth and market position,” he said in an interview with the Handelsblatt in May.
removal program
2000
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Henkel wants to eliminate worldwide by the end of 2023. The group employs a total of 52,000 people.
This would increase income, you could invest more money in new and existing brands and thus increase the relevance of the products in retail. Observers, on the other hand, are skeptical: For them, the merger of the divisions is primarily a defensive measure with advantages on the cost side, which does not immediately lead to increasing sales.
Like all companies in the consumer goods industry, Henkel is struggling with rising raw material costs and incomplete supply chains. The Düsseldorf-based company is expecting additional costs of around two billion euros this year. That reduces the profit. Analysts at DZ Bank assume that the EBIT margin will fall to 10.2 percent in the first half of the year. In 2021, this was still 13.4 percent.
Henkel is additionally burdened by the withdrawal from Russia. The group achieved sales of around one billion euros in the country, which will be missing in the future.
More: Henkel boss rejects criticism of Russia commitment: “We didn’t hesitate long”