Unilever Announces Job Cuts and Division of Ice Cream Unit
Unilever, the company behind brands like Marmite and Dove soap, has announced plans to cut approximately 7,500 jobs worldwide as part of a comprehensive three-year cost-saving initiative. Additionally, the conglomerate revealed its intention to separate its ice cream business, which includes popular brands like Wall’s, Ben & Jerry’s, and Magnum.
The spin-off of the ice cream division is set to commence immediately and is expected to be finalized by the end of 2025. Unilever stated that this restructuring is aimed at enabling the company to “do fewer things better.”
The job reductions, primarily impacting office staff, constitute over 5% of Unilever’s global workforce of 128,000 employees and are projected to generate savings of around €800 million (£684 million) over the next three years.
Unilever, which employs 6,000 individuals in the UK across various locations, including ice cream production in north-east Gloucestershire, Marmite and Bovril production in Burton-on-Trent, and Pot Noodles manufacturing in Newport, disclosed that its ice cream division recorded global sales of €7.9 billion (£6.75 billion) last year.
However, the company noted that the ice cream business differs significantly from its other consumer product lines due to its reliance on a frozen goods supply chain and its seasonal nature.
Ian Meakins, chairman of Unilever, emphasized that the separation of the ice cream division and the implementation of the productivity program will lead to a simpler, more focused, and higher-performing Unilever. He anticipates the creation of a world-leading ice cream business with robust growth prospects and a promising future as an independent entity.
Unilever’s announcement prompted a 5% increase in its shares. Matt Britzman from Hargreaves Lansdown remarked that the decision to split off the underperforming ice cream unit did not come as a surprise. He speculated that a demerger is the most likely outcome, where current shareholders would receive shares in the newly listed ice cream business. However, Unilever has not ruled out other options, such as a direct sale of the business.
Investors will have the opportunity to decide whether to retain shares in the new ice cream business or sell them on the market once the demerger is completed.
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