Unilever Announces Ice Cream Spin-Off, Up to 7,500 Job Cuts

Unilever Announces Ice Cream Spin-Off, Up to 7,500 Job Cuts

Published: March 19, 2024

Unilever, a British multinational consumer goods giant, announced today details of its ongoing restructuring aimed at improving profitability and streamlining its operations for significant business growth.

“The Board is determined to transform Unilever into a higher-growth, higher-margin business that will deliver consistently for all stakeholders,” Unilever Chair Ian Meakins said in the company’s official announcement.

“Improving our performance and sharpening our portfolio are key to delivering the improved results we believe Unilever can achieve,” he added.

Its “Growth Action Plan” has two key components: separating the company's ice cream business and implementing a workforce reduction program.

Ice Cream Unit to Become Separate Entity

Unilever will spin off its ice cream division, which includes popular brands like Ben & Jerry's and Magnum, into a new and independent company.

This decision comes after a strategic review identified the ice cream business as having a different operating model compared to Unilever's other core businesses.

The ice cream division operates with a complex cold-chain logistics network, impacting its profit margins compared to Unilever's personal care or home care products.

Additionally, the social stances taken by some ice cream brands have occasionally created controversy for Unilever like Ben & Jerry's 4th of July campaign last year.

Separating the ice cream business allows both entities to focus on their individual strategies and growth opportunities.

“Following separation, Unilever will become a simpler, more focused company, operating four Business Groups across Beauty & Wellbeing, Personal Care, Home Care and Nutrition,” the company stated.

The new ice cream company is expected to be established as a demerged entity, potentially involving a separate stock listing within the next 18 months.

Up to 7,500 Job Cuts Expected

As part of the restructuring plan, Unilever will also implement a workforce reduction program, eliminating up to 7,500 jobs globally.

This move targets primarily "office-based roles" and represents roughly 6% of Unilever's total workforce of about 128,000.

“We are committed to carrying out our productivity program in consultation with employee representatives, and with respect and care for those of our people who are impacted,” Unilever CEO Hein Schumacher said.

The company expects the job cuts to contribute to increased productivity and cost savings, which will be reinvested in core business areas, research & development, and marketing efforts.

The restructuring comes amidst pressure from investors who have urged Unilever to streamline its operations and improve its financial performance.

Unilever’s sales growth has lagged behind competitors in recent years, and the company faced criticism for its unsuccessful bid to acquire GSK's consumer health division in 2022.

“Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability,” Schumacher explained.

The restructuring plan and new ice cream entity are expected to be completed by the end of 2025.

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