Newell Brands is launching a restructuring and savings initiative, Project Phoenix, the company said is intended to will its scale to reduce complexity, streamline the operating model and drive efficiencies.
Newell expects to substantially implement Project Phoenix by the end of 2023, it announced.
Project Phoenix incorporates various initiatives designed to simplify the organizational structure, streamline company real estate and centralize supply chain functions including manufacturing, distribution, transportation and customer service as well as transition the business to a unified One Newell go-to-market model in key international geographies.
As part of the initiative, Newell will implement a new operating model, consolidating its five operating segments into three. The company will combine the Commercial Solutions, Home Appliances and Home Solutions segments into one operating segment, Home & Commercial Solutions. Learning & Development and Outdoor & Recreation will remain as Newells’ other two operating segments. The company will report on this basis from January 1.
In personnel moves, Newell has named Kris Malkoski as segment CEO for Learning & Development, Mike McDermott as segment CEO for Home & Commercial Solutions, and Jim Pisani as segment CEO for Outdoor & Recreation, it reported. Dennis Senovich, chief supply chain officer, will lead the Newell manufacturing, distribution, transportation and customer service functions globally.
Newell expects to realize annualized pre-tax savings in the range of $220 million to $250 million when it fully implements Project Phoenix. The company anticipates restructuring and related charges associated with the initiative to be in the range of $100 to $130 million. Newell expects to substantially incur the charges by 2023’s end. As it exists, the restructuring plan will result in the elimination of approximately 13% of Newell Brands’ office positions. The company will begin reducing headcount in the first quarter, with most of the labor actions set for completion by year’s end, subject to local law and consultation requirements.
“We are taking action to simplify and strengthen our organization by leveraging the scale and power of One Newell to optimize our cost structure and operate more efficiently,” said Newell CEO Ravi Saligram in announcing the initiative. “Specifically, we are evolving our operating model into three operating segments based on similarities of consumer and customer dynamics, which will reduce duplication and yield synergies. Based on the success of Project Ovid, we are moving to a unified global manufacturing organization that we expect to drive meaningful margin improvement in the long term. Also, we are reducing international fragmentation by moving to a One Newell go-to-market approach in key geographies. These actions are a continuation of the simplification agenda that we have driven over the last four years and in response to the difficult macro environment. We expect to unlock significant savings from the restructuring initiatives, which should help partially offset the impact of macro-economic pressures on the business while making us a more nimble and agile organization.”