Today, we are announcing our restructuring initiative called Project Phoenix which is aimed at strengthening our company by leveraging our scale to further reduce complexity, streamline our operating model and drive operational efficiencies. I will share an overview of the changes we are making and then outline how those will impact some of our workforce and what to expect next.
Through Project Phoenix, we’re evolving our operating model, moving from seven Business Units to three Segments which will reduce duplication, yield greater efficiencies and enable us to be more consumer and customer-centric. The Segments and Segment CEOs are:
Learning & Development, led by Kris Malkoski , includes Writing and Baby.
Home & Commercial, led by Mike McDermott , includes Commercial, Food, Home Fragrance and Home Appliances.
Outdoor & Recreation (O&R) will continue to be led by Jim Pisani . In O&R, we are moving from three vertical businesses into one fully integrated Segment.
As a result of the changes to our operating structure, Chris Robins will leave Newell Brands on February 1 . She has had many accomplishments during her tenure including reshaping the global Home Appliances portfolio, exiting unprofitable categories and countries to allow for focus and increased portfolio gross margin; creating an at-home specialty coffee category under Mr. Coffee that was nearly 100% incremental, driving significant market share; and developing a manufacturing and finished goods sourcing strategy that aligns to simplification, margin improvement and customer service. I am grateful to Chris for her leadership and wish her the very best in her future endeavors.
Lisa McCarthy will assume a new role as Chief Operating Officer of the Home & Commercial Segment , reporting to Mike McDermott. Lisa is an incredible leader and has demonstrated a steadfast commitment to the company in her 18 years of service. I know that she will be a trusted partner to Mike and a tremendous asset to the Home & Commercial Segment.
Our International business remains a top priority for Newell. As part of Project Phoenix, we are continuing to reduce international fragmentation by moving to a One Newell go-to-market approach in key geographies. As you know, we announced our One Newell model in Canada last fall, and we will be announcing our One Newell leadership for LATAM, Australia/New Zealand (ANZ) and Japan on Thursday .
As a result of the work we have done on our International business over the last year, María Fernanda Mejía has mutually agreed that having a CEO of International is premature for us at this time and she will be leaving the company on February 1. I’m grateful to MF for her counsel and passion and appreciate the effort and attention she has given our International business over the last year. I wish her the very best in her future endeavors.
Based on the success of Project Ovid and in the spirit of One Newell, we’re moving to a unified global Supply Chain organization and centralizing manufacturing , which we expect to drive meaningful margin improvement in the long term. Dennis Senovich , our Chief Supply Chain Officer , will lead our manufacturing, distribution, transportation and customer service functions globally.
In the U.S., we’re moving to a One Newell sales model for Walmart, Target and Costco . Centralizing these teams will simplify our customer interactions, significantly improve the customer experience and strengthen our position as a best-in-class partner. Chief Customer Officer, Mike Hayes will implement the One Newell sales model for our top customers and continue to lead the central Sales function. The Amazon team, which is already under a One Newell umbrella, will continue to report to Mike Geller, President, eCommerce & Digital, with a dotted line to Mike Hayes .
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-economic environment. Project Phoenix will unlock savings for the company, while making us a more nimble and agile organization and well-positioned for long term, profitable and sustainable growth. I will share more detail around the action we are taking later this week.
As we’ve talked about on many occasions, we need to cut overhead expenses and adjust our budgets to the reality of the economic environment and the performance of our company . One of the important ways we are doing this is by taking decisive action with our real estate portfolio. In a hybrid work environment, we have the opportunity to close or consolidate offices and adopt new ways of working. Today, we are announcing the closure of our corporate offices in Boca Raton, FL and South Deerfield, MA . Boca employees will work remotely and from the Miami office as business requires and South Deerfield employees will be moved to existing spaces locally. Neither closure affects our labs in South Deerfield or Boca, nor does the closure in South Deerfield affect our distribution and manufacturing sites or retail stores in that location. Both the Home Appliances and Home Fragrance businesses remain priorities for the company. Your leaders will follow up later today with additional information about these closures.
HOW OUR RESTRUCTURING AFFECTS OUR PEOPLE
I am committed to communicating about the changes to our company transparently. It is in this spirit that I share that regrettably, as a result of the restructuring, a pproximately 13% of office employees will be departing the organization. Today, impacts will occur in the U.S. and Canada and today through Wednesday in LATAM . In Australia and New Zealand (ANZ), employees will receive a communication on January 30 that outlines what to expect and next steps . I take very seriously decisions about the livelihood and wellbeing of our employees and understand that they will affect the lives of those who are impacted in a significant way.
There’s no sugar coating this news. We will have to part with colleagues who we value and enjoy working with. There are very talented employees who will be leaving Newell and I know they will make many positive contributions at other companies, as they have at Newell. We will ensure that these colleagues will be treated with respect and dignity, and we are doing all we can to help their transitions, including comprehensive separation packages.
U.S & Canada
In the U.S. and Canada, we are communicating with professional and clerical employees who will be leaving the company today . We anticipate that all conversations will take place today. Retail associates who will be impacted will be notified at their next scheduled shift.
I realize that the uncertainty of not knowing whether your employment will be continued is incredibly difficult and anxiety-provoking. It is our intention to complete this process as quickly and respectfully as possible , so no one is waiting longer than necessary to find out whether they will be exiting or staying with Newell.
Here is what professional and clerical employees in the U.S. and Canada should expect today:
Upon the conclusion of my remarks this morning, HR will send Outlook invitations for 1:1 conversations to employees who will be departing. All invitations for these conversations will have the subject line “ Exit Conversation ”.
We anticipate that all invitations for exit conversations for employees in the U.S. and Canada will be sent by 10:30 a.m. ET .
As a courtesy, we ask all employees to refrain from sending Outlook invitations to employees in these regions until this time.
Once the invitations have been sent, professional and clerical employees in the U.S. and Canada will receive an email from Employee Communications stating that all exiting employees in the U.S. and Canada have been notified they will be having an exit conversation via Outlook invitation.
Each exiting employee will have an individual conversation with HR and a leader from their business, at which time they will receive the details of their separation agreements.
While our priority today is those departing the company, in some circumstances managers may reach out to employees who will not be exiting to discuss role and/or manager changes . These managers are asked not to do so until they’ve received the above communication from Employee Communications. The subject line for these conversations will be “Y our Continued Employment at Newell Brands. ” If you don’t receive an email with this subject line or hear from your manager right away, you should not be concerned. Many managers will be focused on exit conversations for much of Monday and will then turn their attention to employees who will be staying.
Departing employees (with very limited exception) will have access to our systems like Outlook and Teams until Wednesday close of business (local time) and their last day (again, with limited exception) will be February 1 . In the U.S., this will provide employees with a full month of benefits.
Employees in all countries in the region should proceed to the office as normal, and HR will provide further direction about the process shortly.
In ANZ, employees will receive a communication on January 30 that outlines the process and shares next steps.
To follow, you’ll find a summary of what is happening in other locations.
We are transitioning to a One Newell model in key international geographies, and we will evaluate the appropriateness of a One Newell go-to-market approach in EMEA, in consultation with our employee Works Councils, where necessary. We will keep you apprised of our progress.
We will announce the leadership of our One Newell model in Japan on Thursday.
APAC (ex-Japan and ANZ)
We are continuing to assess the impact of our restructuring to our business in APAC, outside of Japan and ANZ, and we will communicate as we know more.
This will be an incredibly difficult time for many at the company. No matter our situation, we will all feel the effects of such a large organizational change one way or another. Let us all be sensitive to what’s happening in our interactions and expectations and call upon our compassion to support those who will be departing due to circumstances beyond their control. I ask leaders to be understanding and supportive as employees process the news and adapt to the changes we are making. And I ask employees to be patient and acknowledge that their leaders may have had to make very challenging decisions and may be having very difficult conversations this week.
For those who will be part of our go-forward organization, we appreciate your patience over the next few days and weeks as we navigate a lot of change at once. It may be necessary to operate in the grey for a bit but be assured that we are committed to transparent communication and have confidence that we are working through any ambiguity to provide answers and clarity as soon as possible . You’ll hear from your BU and functional leaders today and tomorrow, but I’ve asked them to wait to host functional and Segment town halls until at least Thursday out of respect to our departing teammates and in the interest of conversations that need to take place with employees who have a role or manager change.
On Thursday, I will send an All Company email in the morning (ET) with further details about the go-forward organization, including leadership appointments. I will not be announcing additional layoffs on Thursday. Following my email on Thursday , I’ll host a Global Town Hall at 10:00 a.m. ET to discuss the new structure and way forward and to answer your questions . You’ll receive a calendar invitation on Thursday morning, so please hold the time until then. A replay of this meeting will also be available.
While the next few months may be challenging as we navigate some uncertainty and adapt to our new structure, establish new ways of working and in some cases new roles or new leadership, be assured that we remain committed to making Newell a great place to work, grow and thrive. I look forward to continuing to partner with you to execute our priorities, fulfill our purpose and achieve our aspirations.
A MESSAGE TO DEPARTING EMPLOYEES
To those colleagues who will be leaving us, I want to say thank you, from the bottom of my heart, and on behalf of the entire Leadership Team, for your hard work and contributions, for sharing your passion and talent with us and for your commitment to Newell Brands. Each of you has played a role in enhancing and brightening consumers’ lives and creating moments of joy. And while our journey together may be ending here for now, I wish you every success.