Unilever to cut 7,500 jobs for cost saving

Unilever said on Tuesday it would spin off its ice cream unit, home to popular brands such as Magnum and Ben & Jerry’s, and cut 7,500 jobs in a new cost-savings programme.

Investors cheered the plan, sending shares in Unilever, one of the world’s biggest consumer goods companies, up nearly 6 per cent at one point.

The spinoff will begin immediately and is expected to complete by the end of 2025, London-listed Unilever said. The ice cream business is “in the process of moving to a separate head office in Amsterdam” but CEO Hein Schumacher said on a call with journalists that he was “open to options” regarding where it could list.

The plan was welcomed by activist investor and board member Nelson Peltz’s fund and by Unilever shareholder Aviva.

Unilever said it aims to deliver mid-single-digit underlying sales growth and modest margin improvement after the split. The ice cream business accounts for about 16 per cent of Unilever’s global sales, and in some countries contributes a third or 40 per cent.

The group, whose other brands include Dove soap, Marmite and Hellmann’s condiments, also launched a programme to save costs of around 800 million euros ($869 million) over the next three years.

The proposed changes would impact around 7,500 jobs globally, mostly office-based, with total restructuring costs anticipated to be around 1.2 per cent of overall turnover during the period.

The cuts will affect about 5.9 per cent of Unilever’s workforce of about 128,000 people.

“We are looking across the organisation, so in our head office, corporate centre, as well as in business group coordination points, as well as in business units in countries,” Schumacher said, but did not elaborate on which regions would be hit hardest by job cuts.