Unilever has announced its plan to trim its global workforce by 7,500 positions and initiate the spin-off of its ice cream division as part of a comprehensive restructuring strategy.
The job reductions will impact office personnel, constituting over 5% of its total global workforce of 128,000 employees. This move is part of a broader overhaul to save around €800 million (£684 million) over the next three years.
Ice-Cream Division Split
The ice cream division boasts five of the globe’s top-selling 10 ice cream brands, such as Wall’s, Magnum, and Ben & Jerry’s. Additionally, it produces Cornetto, Viennetta, Carte d’Or, and Breyers, which hold significant market share in the US.
A demerger of the division, with annual revenues totalling €7.9 billion and contributing 16% to group sales, appears to be the most probable scenario, although Unilever is exploring other possibilities. The spin-off is anticipated to conclude by the end of 2025.
Reuters reported that the ice cream business is “in the process of moving to a separate head office in Amsterdam.” Still, CEO Hein Schumacher said on a call with journalists that he was “open to options” regarding where it could be listed.
“The default route that we’re pursuing at this moment is a demerger and a separate listing for that business,” he said. “Historically the company has been a Dutch-Anglo company. We are managing the food and ice-cream divisions currently in the Netherlands, and the remainder of the company here from London. That doesn’t mean that ice-cream will be a Dutch company or a UK company. We’re looking at all options.”
In addition, he clarified that the ice cream segment differed from the rest of the business due to its frozen supply chain, pronounced seasonality, and substantial capital demands.
Meanwhile, Ian Meakins, the Unilever chair, said: “The separation of ice cream and the delivery of the productivity programme will help create a simpler, more focused and higher-performing Unilever. It will also create a world-leading ice-cream business, with strong growth prospects and an exciting future as a standalone business.”
A Strategic Move
Following the separation, the group will retain four divisions: beauty and wellbeing, personal care, home care, and nutrition. Notable brands within these divisions include Vaseline, Dove, Liquid I.V., and Paula’s Choice Skincare.
This action signifies a significant step for Schumacher, who assumed the CEO role in July and, in October, outlined strategies to regain investor trust by streamlining the business following Unilever’s acknowledgement of underperformance in recent years.
Unilever’s decision to trim its global workforce, spin off its ice cream division, and streamline its business operations under CEO Schumacher marks a pivotal moment in the company’s trajectory. This strategic move reflects a commitment to refocusing efforts, improving efficiency, and addressing investor concerns, ultimately positioning Unilever for greater competitiveness and sustainability in the dynamic global market landscape.
