Unilever announced a decision on Tuesday to divest its ice cream division, known for brands like Magnum and Ben & Jerry’s while initiating a plan to eliminate 7,500 positions in a cost-reduction effort.
The company’s shares surged nearly 6% following the announcement, underscoring investor approval for the move by one of the largest global consumer goods firms.
The divestiture process is set to start immediately and aim for completion by the end of 2025, according to Unilever, which is listed in London. The ice cream segment is transitioning to a new headquarters in Amsterdam, though CEO Hein Schumacher signalled openness to alternative listing locations during a media briefing.
Activist investor Nelson Peltz, a Unilever board member through his fund, and shareholder Aviva have supported the strategy.
Post-spinoff, Unilever targets moderate sales growth and slight margin enhancements. The ice cream sector represents about 16% of Unilever’s total sales, surging to a third in certain markets.
In addition, Unilever has unveiled a cost-saving strategy to reduce expenses by approximately 800 million euros ($869 million) over three years. This plan will impact roughly 7,500 global positions, mainly office roles, with restructuring expenses expected to be about 1.2% of total sales during this timeframe.
This workforce reduction represents nearly 5.9% of Unilever’s 128,000 employees.
Schumacher detailed the company-wide scope of the job cuts, including at the headquarters and within country-specific business units, without specifying which areas would be most affected.
This action marks a significant move by Schumacher, who took the helm as CEO in July and by October was already strategizing to regain investor trust by streamlining operations. This came after acknowledging that Unilever had fallen short of expectations recently, during which its predecessor Alan Jope faced criticism for overexpanding the brand portfolio to around 400, potentially diverting focus from core products.
Peltz’s involvement through his Trian investment firm, holding a 1.45% stake, has been noteworthy. Known for revitalizing consumer goods companies, Peltz joined Unilever’s board in 2022 and has endorsed the newly announced strategic directions.
