Unilever said on Tuesday that it would cut 7,500 jobs and split off its ice cream unit, which includes well-known names like Magnum and Ben & Jerry’s. The move is part of a new plan to save money.
Investors liked the plan, and at one point, shares in Unilever, which is one of the biggest consumer goods companies in the world, went up almost 6%.
Unilever, a company listed in London, announced that it would start the split right away and finish it by the end of 2025. It is “in the process of moving to a separate head office in Amsterdam” for the ice cream business, but CEO Hein Schumacher told reporters on a call that he was “open to options” about where it could list.
Nelson Peltz’s fund, an outspoken investor and board member, and Aviva, a shareholder in Unilever, both liked the plan.
After the split, Unilever said it wants to see real sales grow by around 10% and margins get a little better. About 16% of Unilever’s world sales come from the ice cream business. In some countries, it makes up as much as 40% or a third of sales.
Dove soap, Marmite, and Hellmann’s are some of the other names owned by this group. They also started a plan to save about 800 million euros ($869 million) over the next three years. The proposed changes would affect about 7,500 jobs around the world, most of which would be in offices. The total cost of restructuring is expected to be about 1.2% of total sales during the time.
About 5.9% of Unilever’s employees, or 128,000 people, will lose their jobs because of the cuts.
Schumacher said, “We are looking across the organization, so in our head office, corporate center, business group coordination points, as well as in business units in countries.” He did not say which regions would lose the most jobs, though.
Schumacher made a big statement with this move. He became CEO of Unilever in July and in October laid out plans to win back investor trust by making the business simpler. He did this after admitting that Unilever had not done well in recent years. Critics criticized Alan Jope, who came before him, for allowing the group’s brand portfolio to grow to about 400, which diverted attention from the company’s best producers.
