Consumer goods giant Unilever announced a significant restructuring plan that includes separating its iconic ice cream business (home to brands like Magnum, Ben & Jerry's, and Wall's) and cutting 7,500 jobs worldwide. This bold move by CEO Hein Schumacher aims to revive the company's performance and address investor concerns.
Ice Cream Division Spinoff
The spinoff, will begin immediately and is expected to be completed by late 2025. While the ice cream division is currently relocating to Amsterdam, Unilever remains open to options regarding its potential listing location. The ice cream unit, representing 16% of Unilever's global sales, could attract significant interest from private equity firms.
Cost-Cutting Measures
Alongside the spinoff, Unilever will implement an €800 million cost-savings program over the next three years. Approximately 7,500 jobs, primarily office-based, will be eliminated as part of this initiative. The company emphasizes that technology, including AI, will play a role in these cost-saving efforts.
Investor Response
Investors enthusiastically welcomed the news, with Unilever's shares surging up to 6%. Activist investor Nelson Peltz, who joined the board in 2022, expressed support for the strategic moves. Analysts view the spinoff as positive given the ice cream business's volatility and impact on margins.
Schumacher's Leadership
This restructuring marks a decisive step by Schumacher, who took the helm in July 2022. He faces the task of boosting growth and investor confidence after years of underperformance compared to rivals like Procter & Gamble. Past disposals of Unilever divisions have been acquired by private equity, suggesting a similar path for the ice cream business.
