Job cuts in pounds 225m Unilever shake-up

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The Independent Online

Shares in Unilever fell 16p to 1,289p yesterday after the Persil detergent and consumer foods group said it would take a surprise pounds 225m restructuring charge.

The company is to stop fabric powder production in St Louis, Missouri, with the loss of around 220 jobs. There will also be big changes in Unilever's European food businesses - but no details are yet known.

It is possible that Unilever will reveal further details with its full- year results on 20 February. Job losses in the UK seem likely.

The pounds 225m charge will be taken against the group's fourth- quarter profits with pounds 62m for the American detergents cuts and pounds 126m at the European food businesses.

The timing of the announcement surprised City analysts. They were waiting for a strategic review by chairman-elect Niall FitzGerald, who is keen to enable management to respond more quickly to market needs.

In the US, Unilever will concentrate liquid detergent production at St Louis, with production of detergent powder centred on Cartersville, Georgia. The closure and transfer of production to the Georgia plant is expected to be completed by the end of the year.

Unilever has been trying to improve manufacturing competitiveness and has made two big provisions in the last five years. In 1990 it announced a pounds 305m restructuring to reduce costs. In 1990 a pounds 490m charge signalled further cost reductions - although the benefits did not begin to feed through to profits until last year.

Analysts were not expecting a third round of exceptional charges. However, Unilever has been moving towards the concentration of production in larger plants both in the US and the UK.