Unilever, the buyer goods giant, he said on Tuesday that it will cut 7,500 jobs and spin off its ice cream division, which incorporates Ben & Jerry’s, to chop costs and simplify its brand portfolio.
The moves will make Unilever “simpler, more focused and more efficient,” Ian Meakins, chief executive of the London-based company, said in a press release. The group’s ice cream division generated sales of seven.9 billion euros ($8.6 billion) last 12 months, accounting for about 13 percent of total group sales.
The division includes Ben & Jerry’s, which Unilever acquired in 2000, together with other brands comparable to Cornetto, Magnum, Talenti and Wall’s. The spin-off is anticipated to wrap up by the top of 2025.
Hein Schumacher, who took over as CEO of Unilever in July, announced the plan late last 12 months to “drive growth and unlock potential”, partly by focusing greater attention on just 30 of the group’s a whole lot of brands.
He said Tuesday that the job cuts and spin-off of ice cream would “accelerate” the plan, saving nearly $870 million in costs over the subsequent three years. The “mainly office job” layoffs all over the world represent about 6 percent of Unilever’s workforce.
After the split, Unilever’s remaining units would come with health and beauty brands comparable to Dove soap, consumer goods comparable to Surf detergents, and food brands including Hellmann’s mayonnaise.
Unilever rival Nestlé moved lots of its European ice cream brands right into a three way partnership with a personal equity firm in 2016, and in 2019 sold its U.S. brands, including Dreyer’s and Häagen-Dazs, to the enterprise.
Unilever has struggled in recent times, with revenue growth supported by sharp price increases as sales volumes decline. Pressed by inflation, consumers are turning to cheaper brands in lots of Unilever’s largest categories, especially less basic products comparable to ice cream.
As the corporate said in an earnings report last month, the ice cream division faced the best input cost inflation in Unilever’s portfolio. It passed a few of those costs on to consumers by encouraging them to purchase less or switch to cheaper brands, resulting in a “disappointing year with declining market share and profitability,” the corporate said.
“The company has been trying to accelerate cost cutting to accelerate growth for at least a decade,” Bernstein analysts wrote in a research note. “This plan remains based on the assumption that we will try harder to achieve it or hope to experience it,” they added. Unilever shares rose 3 percent on Tuesday but have been roughly flat over the past 12 months.
Ben & Jerry’s, run by an independent board of directors since its acquisition by Unilever, has not at all times sat well within the portfolio of a staid multinational corporation. The brand’s founders from Vermont speak out on sensitive social and political issues; in 2021 they announced that they’d end sales in Israeli-occupied territories.
That prompted some U.S. pension funds to divest from Unilever and prompted a shareholder lawsuit. Ben & Jerry’s sued Unilever in 2022 to forestall it from selling distribution rights to a licensee in Israel. Unilever eventually sold the rights there to its long-time local partner, which continues to sell ice cream under a rather different brand.
