Unilever announced on Tuesday that it will cut 7,500 jobs and spin off its ice cream business, which includes popular brands like Ben & Jerry’s, Magnum, and Vaseline. CEO Hein Schumacher emphasized the need to simplify the company’s portfolio and drive greater productivity to unlock the potential of the business and position Unilever as a world-leading consumer goods company.
The decision to spin off the ice cream business was attributed to its “distinct characteristics” compared to Unilever’s other brands.
Schumacher believes that separate ownership will allow the ice cream division to increase growth and thrive independently. The split is expected to be completed by the end of 2024.
Alongside the spinoff, Unilever is launching a “productivity program” that will result in the elimination of approximately 7,500 mostly office-based jobs worldwide.
Unilever said it would spin off its ice cream unit, home to popular brands such as Magnum and Ben & Jerry's, and cut 7,500 jobs in a new cost-savings program https://t.co/CXrJKn8oVa pic.twitter.com/ngBOeUleAC
— Reuters (@Reuters) March 19, 2024
This follows a previous round of layoffs in early 2022, when the company let go of 1,500 staff members. Unilever plans to invest in technology to find efficiencies and avoid duplication, with the goal of saving 800 million euros ($867 million) over the next three years.
The announcement was well-received by investors, with Unilever’s shares jumping more than 3% on the London Stock Exchange.
Richard Hunter, head of markets for interactive investor, noted that the share price bounce “goes some way in reversing what has been a difficult last year, as investors have fretted over a company with limited high growth prospects and in need of streamlining despite its reputation as a solid defensive play.”
Some analysts have also pointed out that the spinoff of Ben & Jerry’s, known for its social activism and liberal stances on issues like LGBTQ+ rights, Black Lives Matter, and climate change, could potentially benefit Unilever by distancing the company from the “go woke and go broke” criticism it has faced in the past.
