Unilever to separate ice cream business, layoff 7,500 employees
What's the story
British FMCG giant Unilever has announced plans to separate its ice cream division, home to well-known brands such as Ben & Jerry's and Magnum.
This decision is part of a broader cost-reduction plan that will likely lead to the layoff of 7,500 workers.
The separation process is set to commence immediately with a target completion date by the end of 2025.
CEO Hein Schumacher is spearheading this restructuring initiative with a goal of saving €800 million over next three years.
Why layoffs?
Unilever's growth action plan aims for significant cost reductions
The job cuts are an integral component of Unilever's growth action plan (GAP), which involves reducing operational costs.
The company is now concentrating on a selection of superior brands in appealing categories to maximize future growth.
Following the separation of the ice cream business and implementation of its productivity program, Unilever expects to achieve mid-single digit sales growth and modest margin improvement.
Aiming for growth
Independent ice cream business set for growth
The strategic division of Unilever's ice cream business is projected to result in a more streamlined company and a leading independent ice cream enterprise with promising growth potential.
Ian Meakins, chairperson of Unilever, expressed that this division will foster 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," said Meakins.
Valuable assets
Unilever's ice cream division is a strong revenue contributor
Unilever's ice cream division, which features brands like Ben & Jerry's and Magnum, reported impressive sales figures of €7.9 billion in 2023.
The company predicts a "structurally higher" margin following the separation of the ice cream business and the execution of its productivity program.
Unilver will most like demerge the ice cream business into a new entity, which will eventually lead to a new publicly listed company.