Unilever plans to cut 800 marketers as it slashes agency fees

If there was a single theme at Unilever’s investor seminar in London recently it was cuts. The company will slash marketing head-count by 12 percent globally, or more than 800, mostly in regional operations such as the US. It’s also cutting the number of product varieties it sells by 30 percent and will continue to trim agency and commercial production fees, company executives said.

Unilever executives framed the moves as part of continuous cost savings of the sort that have been common since Paul Polman became CEO in 2009. But the talk of spending cuts, particularly in marketing, was more detailed than usual in this year’s investor presentation.

Unilever’s growth has slowed, particularly in what had been its biggest competitive strength – developed markets – as economic growth there slowed and competition from the likes of P&G and L’Oreal, among others, increased.

Jean-Marc Huet, chief financial officer, says Unilever expects to find more than $470 million in marketing savings this year, up from $260 million last year, in part from reductions in “non-working media,” or what the company spends on such things as agency fees and commercial production. It also expects to save by shifting more spending to digital, which now accounts for 15 percent of ad spending for the world’s No. 2 spender. That’s up from 14 percent last year and 12 percent in 2011.