US – Multinational Flavors & Fragrances giant, IFF, is set to undertake a comprehensive restructuring of its business, where it will reduce headcount to optimize internal costs and streamline its business to better serve customers.
The company also plans to downsize its board, to 10 members from the current 14, by May, as it goes ahead to revamp the kinds of people on its board, adding more senior executives with experience relevant to the IFF’s profile and portfolio.
This announcement follows the appointment of Frank Clyburn, a former Merck executive with deep experience in integration, revenue building, and streamlining operations, to take the helm after former CEO Andreas Fibig retired last fall.
In addition to the two moves, the American ingredient company plans to reduce its internal costs by US$350 million to US$400 million between 2023 and 2025. IFF will also optimize internal processes, streamline its supply chain, and improve procurement and demand management.
The company said it will take a look at each business and how it is performing. The better-performing businesses in more attractive markets will see more investment to fuel growth, while those not performing well, will either see minimal investment or IFF will look to divest them.
It already divested some non-core businesses, including a business making microbial controls chemicals primarily for industrial applications and a fruit-processing business, for about US$1 billion.
With the new restricting move, IFF hinted that another three divestitures will happen in the first quarter of 2023, expecting to cash in US$1.2 billion to put toward its debts.
Still in its portfolio restricting, the company aims to consolidate its four current business divisions, Nourish, Scent, Health & Beauty, and Pharma, into three, Food & Beverage, Household & Personal Care, and Health, by the end of 2023.
“Our refreshed strategic framework and new operating model will increase customer centricity and better align with end-market needs. This next phase is designed to ensure we are innovative, efficient, and disciplined as we strengthen our competitive position and achieve long-term financial success,” Clyburn said in a statement.
“To do so effectively, we are enhancing our productivity, reducing our cost base, reinvesting in our highest-value businesses, embedding ESG+ in all we do, and enhancing our culture to maximize value creation for our customers, employees, and shareholders.”
Moreover, EDGE, the leading global assessment and business certification for gender and intersectional equity, has recertified IFF as EDGE Move level globally.
This marks the first, and currently the only, time a company has earned this level of recognition twice. The assessment encompassed 27 countries, giving IFF the distinction of having the largest number of EDGE-certified countries at one time.
Women at IFF represent 36.4% of leadership, with no statistically relevant gender pay gap in favor of men in any of the 27 assessed countries.
In 2022, the company advanced efforts to create a fairer and more inclusive place to work. This includes introducing a Global Parental Leave policy, which provides a minimum of 16 weeks of paid leave for all new or continuing parents following the birth, surrogacy, or adoption of a child.
The company has also expanded the size and scope of activities of the Women@IFF employee resource group.