Unilever's CEO Hein Schumacher has unexpectedly stepped down from his position after less than two years, as the firm seeks to advance its cost-cutting agenda.
The company announced that Schumacher will be replaced by Unilever's finance chief Fernando Fernandez starting next week and will exit the company at the end of May, as reported by .
This development comes in the midst of Unilever's extensive "productivity programme," which involves cutting thousands of jobs and spinning off its ice cream division, including the Ben & Jerry's unit.
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Following a "full review" of separation options, the ice cream business will be incorporated in the Netherlands and maintain its headquarters in Amsterdam, while also having a triple listing in New York, London, and Amsterdam.
No specifics were provided about the abrupt departure, but according to the Financial Times, Unilever's board reportedly dismissed Schumacher at a board meeting yesterday, deciding that CFO Fernandez was "better suited" to implement the turnaround plan.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, commented on the sudden leadership change: "Markets typically flinch at abrupt leadership shifts but his deep experience, and a clear mandate to push change with urgency, signal a bold move to accelerate the final stretch of Unilever's turnaround," UBS analysts noted that Fernandez is " well known" within the investor community.
While Schumacher may have laid the groundwork for the cost-cutting plan, the execution of the plan is becoming increasingly crucial.
Shares in Unilever fell by two per cent following the news and have seen a decline of over four per cent since the beginning of the year.
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Chris Beckett, head of equity research at Quilter Cheviot, commented on the situation: "Losing a chief executive after 18 months is never a good thing," he added, "For Unilever, especially during a strategy turnaround, it does not suggest things were going well behind the scenes or the business was firing on all cylinders."
In its full-year results released earlier this month, Unilever reported what analysts described as "exceptionally weak" guidance.
Market growth, which decelerated throughout 2024, is predicted to remain sluggish in the first half of this year, with underlying sales growth estimated at between three to five per cent.
Beckett further noted, "The last set of results suggested that turnaround had stalled somewhat, with weak guidance and sales growth only likely to improve as the company passes on higher commodity costs."