Unilever plans to spin off its ice-cream unit into a stand-alone business, as the consumer goods group unveiled a new cost-savings programme that will see 7,500 jobs cut globally.
The moves would make for “a simpler, more focused and higher-performing Unilever,” Ian Meakins, the London-based company’s chair, said in a statement. The group’s ice-cream unit generated €7.9 billion in sales last year, or about 13 per cent of the group’s total.
The division is home to Ben & Jerry’s, which Unilever acquired in 2000, along with other brands such as Cornetto, Magnum, Talenti and Wall’s. The spin-off is expected to be completed by the end of 2025.
Hein Schumacher, who took over as Unilever’s chief executive in July, announced a plan late last year to “drive growth and unlock potential”, in part by focusing more attention on just 30 of the group’s hundreds of brands.
On Tuesday, he said the job cuts and ice cream spin-off would “accelerate” the plan, saving nearly $870 million (€800 million) in costs over the next three years. The lay-offs, of “predominantly office-based roles” around the world, amount to about 6 per cent of Unilever’s workforce.
After the split, Unilever’s remaining units would include health and beauty brands such as Dove soap, consumer goods such as Surf detergent and food brands including Hellmann’s mayonnaise.
Unilever rival Nestlé shifted many of its European ice cream brands to a joint venture with a private equity firm in 2016 and sold its U.S. brands, including Dreyer’s and Häagen-Dazs, to the venture in 2019.
Unilever has struggled in recent years, with revenue growth propped up by steep price increases as sales volumes have declined. Squeezed by inflation, consumers have been turning instead to cheaper brands in many of Unilever’s biggest categories, most notably less essential products such as ice cream.
The ice cream division faced the highest input-cost inflation in Unilever’s portfolio last year, the company said in an earnings report last month.
Unilever aims to deliver mid-single digit underlying sales growth and modest margin improvement after the split, it said in a statement. – This article originally appeared in The New York Times/Reuters
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