Unilever to cut 7,500 jobs and spin off ice cream business
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The news: Consumer goods giant Unilever has announced plans to spin off its multi-billion dollar ice cream business and cut thousands of jobs in efforts to pare back costs and drive performance.
The numbers: Shares in Unilever climbed as high as 5% during trading on Tuesday, lifting the company’s market capitalisation to £98 billion ($190.86 billion).
The context: The potential listing of its €17 billion ice cream business is expected to take place in either London or Amsterdam, given the unit is currently setting up headquarters in the latter city. Unilever plans to trim its 128,000 strong workforce by around 7,500, as part of its strategy to meet €800 million of cost savings over the next three years.
Unilever’s ice cream division includes Wall’s, Magnum and Ben & Jerry’s among its leading brands. A spin off of the division will leave Unilever with four businesses across beauty and wellbeing, personal care, home care, and nutrition.
An internal note from Unilever advisors, Morgan Stanley, seen by Capital Brief, explains that while the ice cream demerger is the most likely separation route, other separation options are being considered. Some analysts expect that the announcement could attract bidders for the business.
What they said: Ian Meakins, chair of Unilever said: “The Board is determined to transform Unilever into a higher-growth, higher-margin business that will deliver consistently for all stakeholders. Improving our performance and sharpening our portfolio are key to delivering the improved results we believe Unilever can achieve.”
The sources: Unilever press release, Bloomberg, Financial Times
