Such job cuts are an extreme measure, but few would disagree that something heavy was called for. Sustained periods of underperformance had led to widespread criticism of the $48bn group. Shareholders have been calling for a division of the constituent food and home product wings, or for an end to its dual nationality, and there were rumours last month of a possible bid from Colgate-Palmolive. And with the private-equity vultures setting their sights ever higher before the current belt-tightening, even a giant like Unilever wouldn't have been out of their reach.
Results are now improving. Underlying sales growth is expected to be at the upper end of its target range of 3-5% for 2007, with pre-tax profits up 3% to 2.7m euros, on turnover up 1% to 20m euros. That's an impressive performance against a backdrop of rising commodity prices, especially for Unilever.
The company is axing half of its senior UK managers in a bid to streamline its operations, and has reduced senior management worldwide by 30%. The number of people it employs globally dropped by 27,000 last year, and it has begun shedding some of its weaker brands to focus on its core offerings. Perhaps private-equity has taught it an essential lesson in shaping up.
For an in-depth retrospective on Unilever, read this article from MT's 40th anniversary special.