Unilever must cut costs to survive in Irish Republic

By Rod Addy contact

- Last updated on GMT

Unilever has been arguing with unions over redundancy packages for staff
Unilever has been arguing with unions over redundancy packages for staff

Related tags: Republic of ireland

Unilever has made 36 people redundant at its head office in Dublin, claiming unless it takes drastic cost-cutting measures it will not survive competition in that market.

Following plans announced in May to lay 40 people off, the consumer goods giant said it had been able to reduce that number slightly.

However, in a statement, it said: “Some people affected by the announcement have since found alternative roles within the company and, consequently, 36 people are now confirmed as redundant.”

In a recent Irish Labour Court hearing, the Irish Business and Employers’ Confederation, representing Unilever Ireland, defended its redundancy package proposals against objections from the Services Industrial Professional Technical Union.

‘Cost base too high’

“In Ireland the company’s cost base is too high and if they do not address this issue they will not have the funds to invest to survive in the current economic and competitive environment,”​ it stated.

“The redundancy package on offer by the company is in line with those that apply in the Irish market.”

Faced with the union’s backlash against what its members saw as meagre redundancy payments, Unilever had offered a revised package of four weeks’ pay inclusive of statutory payments.

However, the union argued for eight weeks’ pay per year of service, based on a management agreement dating back to 2006.

Compromise

In its judgment, the Labour Court recommended a compromise increase from €600 (£522.65) to €1,000 (£871.23) per year of service.

In second quarter and half-year results announced on July 25, Unilever revealed growth in food sales had been sluggish in Europe, hit by poor weather, particularly affecting ice cream performance.

Ceo Paul Polman confirmed plans to dramatically reduce stock keeping units (SKUs) and improve efficiency in a bid to cut costs.

Commenting on the results, he said: “Developed markets remain sluggish with little sign of any recovery in North America and Europe.”

In addition to its Dublin head office, Unilever Ireland also operates a Lipton Ice Tea kit factory in County Cork, plus sales and marketing teams promoting its products throughout the Irish Republic.

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