Newell Brands, the parent company of Marmot, Ex Officio, Stearns, Bubba, Coleman, and Contigo, among others in the home and office space, has embarked on another organizational realignment to strengthen its front-end commercial capabilities, including consumer understanding and brand communication, to support its “Where to Play/How to Win” mantra the company introduced in June 2023. 

In addition to improving accountability, Newell said in a release that the organizational realignment should “further unlock operational efficiencies and cost savings, reduce complexity and free up funds for reinvestment.”

Most of the plan’s costs include cash severance payments and termination benefits. The company plans to reduce its office staff by approximately 7 percent, with most completed by the end of 2024, subject to local law and consultation requirements.

“In June 2023, we introduced a comprehensive corporate strategy, which has been cascaded enterprise-wide and integrated into Business, Region, Brand and Functional strategies,” explained company 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 the company’s strategic choice to disproportionately invest in the largest and most profitable brands in its portfolio, Newell is implementing a brand management model in its three 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 continued. “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.”

As part of the organizational realignment, the company is making organizational changes it expects to be substantially implemented by the end of 2024, as follows:

  • standing up a cross-functional brand management organization, 
  • realigning business unit finance to support the new global brand management model, 
  • further simplifying and standardizing regional go-to-market organizations, 
  • centralizing domestic retail sales teams, digital technology team, business-aligned accounting personnel, the manufacturing quality team, and HR functions into the appropriate center-led teams to drive standardization, efficiency and scale with a one Newell approach; and 
  • further, optimize Newell’s real estate footprint and pursue other cost-reduction initiatives. 

Once the organizational changes are complete, NB expects to realize annualized pre-tax savings of $65 million to $90 million, net of reinvestment, with $55 million to $70 million expected in 2024.

Newell said in an 8-k filing with the SEC that it would incur approximately $75 million to $90 million in restructuring and restructuring-related charges in connection with the plan, substantially all of which to be incurred by the end of fiscal 2024. These estimated charges consist primarily of

  • $60 million to $70 million in charges related to cash severance payments and other termination benefits,
  • $11 million to $16 million in charges associated with office space reduction and consolidation and
  • approximately $4 million of other charges, including those associated with employee transition and legal costs.

Of the aggregate charges Newell Brands estimates to incur in connection with the plan, it expects that approximately $70 million to $80 million will be in cash expenditures.

Image courtesy Marmot/Facebook