Henkel Group Restructuring Storm: Behind the €525 Million Savings, Thousands of Jobs Face Layoff Crisis!

Henkel, the German consumer goods and adhesives giant, has stepped into the second stage of what is considered the largest restructuring effort in its history. The company confirmed it will close selected warehouses and production facilities as part of a plan to simplify supply chains and reduce costs. Job reductions are expected, though no German plants are on the list for closure.

Chief executive Carsten Knobel told reporters that the focus is on making production, logistics, and procurement more efficient. “We are redesigning processes end to end. This means some sites will no longer be needed,” he explained, adding that the reshaping is critical to Henkel’s long-term competitiveness.

Shifting Toward Consumer Brands

A central pillar of the strategy is the combination of Henkel’s detergents and home care division with its beauty care business, forming a single Consumer Brands unit. The move is designed to cut overlapping costs and sharpen focus on two core categories: laundry and hair care. Well-known names such as Persil, Schwarzkopf, Dial, Pril and Syoss now sit under this umbrella.

Since the restructuring began, Henkel has already discontinued or sold brands worth around €650 million. These were products with thin margins or limited growth potential. Knobel described the process in football terms: “If the restructuring were a 90-minute game, we are still in the first half.” The company estimates the program will ultimately free up €525 million in savings by 2026.

Impact Already Visible

The first phase of changes, launched in 2022, included the elimination of roughly 2,000 jobs worldwide. Although painful, the measures are starting to deliver. Henkel has raised its outlook twice this year on the back of stronger performance. Preliminary results for the first half of 2024 showed sales at €10.8 billion, while adjusted EBIT climbed 28 percent to €1.61 billion. Profitability improved as well, with EBIT margin reaching 14.9 percent compared to 11.5 percent a year earlier.

The adhesives division, Henkel’s largest and most profitable arm, generated €5.48 billion in sales during the first six months of 2024, a modest 2 percent increase driven by higher volumes and slight price adjustments. Adjusted operating profit rose nearly 22 percent to €933 million.

Outlook

Management now expects to hit its long-term goals earlier than originally planned, possibly within two to four years. Targets include steady organic sales growth of 3–4 percent and an operating margin of about 16 percent. Henkel believes the restructuring will position it more strongly in both its consumer and industrial businesses.

The changes come at a time when global manufacturers face pressure from shifting demand, inflation, and competition. For Henkel, the path forward may be challenging, but the company is signaling it is willing to take difficult steps now to secure growth in the years ahead.