Unilever Announces Major Job Cuts and Ice Cream Business Split
In a bold move, Unilever, the company behind household names like Marmite and Dove soap, has revealed plans to slash approximately 7,500 jobs globally as part of an ambitious three-year cost-saving strategy.
The conglomerate also disclosed its intention to separate its lucrative ice cream business, which includes beloved brands such as Wall’s, Ben & Jerry’s, and Magnum. This strategic spin-off is set to commence immediately and is slated for completion by the end of 2025.
By restructuring its operations, Unilever aims to streamline its focus and enhance overall performance. The restructuring, primarily impacting office personnel, is projected to deliver savings of around €800m (£684m) over the next three years.
With 6,000 employees in the UK alone, Unilever has a significant presence in the country, producing a range of products from ice cream in north-east Gloucestershire to Marmite and Bovril in Burton-on-Trent, and Pot Noodles in Newport.
The ice cream division, boasting popular brands like Viennetta, Carte d’Or, Cornetto, and Breyers, generated global sales of €7.9bn (£6.75bn) in the previous year. Despite its success, Unilever noted that the ice cream business differed significantly from its other consumer product lines due to its unique supply chain requirements and seasonal nature.
“The separation of the ice cream business and the implementation of the productivity program will pave the way for a more focused and efficient Unilever,” stated Ian Meakins, the company’s chairman. “This move will not only optimize our operations but also position the ice cream business for continued growth and success as a standalone entity.”
Following the announcement, Unilever’s shares surged by 5%, signaling investor confidence in the strategic overhaul. Analysts like Matt Britzman at Hargreaves Lansdown noted that the decision to divest the underperforming ice cream unit was not unexpected.
The potential divestiture of the ice cream business is likely to take the form of a demerger, where existing shareholders would receive shares in the newly established entity. However, Unilever has not ruled out other options, including a direct sale of the business.
“It appears that a demerger is the most probable scenario, as there doesn’t seem to be a buyer lined up at this stage,” explained Britzman. “Investors will have the choice to retain their stake in the new ice cream business or sell their shares on the market.”
Overall, Unilever’s strategic realignment is poised to reshape the company’s future trajectory, bolstering its core operations and unlocking growth opportunities for its standalone ice cream business.
