Newell Brands has launched an organizational realignment the company expects will strengthen its global brand management and go-to-market strategy while streamlining costs.
In addition to improving accountability, Newell maintained, the organizational realignment should unlock operational efficiencies and cost savings, reduce complexity and free up funds for reinvestment.
As part of the organizational realignment, Newell is setting up a cross-functional brand management organization, the company stated, as well as realigning business unit finance to fully support the new global brand management model. The company said this will further simplify and standardize regional go-to-market organizations, adding it will centralize domestic retail sales teams, the digital technology team, business-aligned accounting personnel, the manufacturing quality team and human resources functions into center-led teams to drive standardization, efficiency and scale with a “One Newell” approach. The company also will further optimize its real estate footprint and pursue other cost reduction initiatives, it added. The company expects to substantially implement realignment actions by the end of 2024.
Once fully executed, Newell Brands expects the organizational design changes to generate annualized pre-tax savings in the range of $65 million to $90 million, net of reinvestment, with $55 million to $70 million expected in 2024. The company anticipates restructuring and related charges to fall in the range of $75 million to $90 million, which it should substantially incur by 2024’s end. The company plans to reduce its office roles by 7%.
The planned realignment supports the “Where to Play/How to Win” initiative unveiled by Newell in June 2023.
“In June 2023, we introduced a comprehensive corporate strategy, which has been cascaded enterprise-wide and integrated into Business, Region, Brand and Functional strategies,” said Newell President and CEO Chris Peterson. “After a thorough assessment, we identified opportunities to strengthen Newell’s front-end commercial capabilities, which are critical to returning the company to sustainable and profitable growth. To support our strategic choice to disproportionately invest in the largest and most profitable brands, we are implementing a brand management model within the three existing global segments with full P&L ownership and four regional go-to-market commercial organizations.
“Through the organizational design changes, we expect to maximize accountability and ownership of financial results, drive consistency in how we work, reduce overhead cost structure and complexity while investing in the capabilities we need to win,” Peterson added. “These actions will enable the company to operate with greater speed and agility. We appreciate our employees’ continued efforts during this transition as we take the difficult but necessary actions to strengthen and reshape the organization for sustainable, long-term competitive advantage and value creation.”
(Pictured above: Newell Brands’ content creation studio and test kitchen in Hoboken, NJ)
