Unilever rejig plan: Consumer goods giant to split off $8.6 billion ice cream unit; 7,500 jobs to be axed
Consumer goods giant Unilever Plc has unveiled a sweeping restructuring plan that includes separating its $8.6 billion ice cream business and cutting 7,500 jobs worldwide. The move, aimed at streamlining operations and jumpstarting growth, marks a significant shift for the UK-based company under the leadership of Chief Executive Officer Hein Schumacher, according to a report by Bloomberg.
Unilever, whose portfolio encompasses brands like Ben & Jerry’s, Magnum, Hellmann’s mayonnaise, and Domestos cleaners, stated that a range of options will be considered for the separation of the ice cream division, with a demerger creating a new publicly listed company being the most likely scenario, the report added.
The ice cream business, which generated sales of €7.9 billion ($8.6 billion) in 2023, has been a long-standing source of controversy for Unilever due to the political stances taken by Ben & Jerry’s. In December 2022, the company settled a legal battle with Ben & Jerry’s independent board over the licensing of the brand in the Israeli-occupied West Bank, as per the report.
Alongside the ice cream separation, Unilever also announced plans to cut 7,500 jobs, primarily impacting office-based roles. The job cuts are part of a broader cost-saving initiative aimed at achieving €800 million in savings over the next three years, the report further added,
Schumacher, who took over as CEO last year after activist investor Nelson Peltz joined Unilever’s board, aims to revitalise growth at the consumer goods conglomerate. The restructuring will leave Unilever focused on four core businesses: beauty and wellbeing, personal care, home care, and nutrition, Bloomberg further added.
The separation of the ice cream unit is expected to commence immediately and be completed by the end of 2024, according to Unilever. Rival Nestle SA previously separated its ice cream business by setting up a joint venture with private equity firm PAI Partners.
Unilever’s revenue grew 4.7% in the final quarter of 2023, slightly ahead of analysts’ estimates, as the volume of products sold increased for the first time since 2021.
With the ice cream business separation and job cuts, Schumacher aims to streamline Unilever’s operations and position the company for future growth amidst increasing competition and evolving consumer preferences in the global consumer goods market.
(With Inputs from Blomberg)
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Published: 19 Mar 2024, 03:05 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.