Unilever, the company behind Marmite and Dove soap, is set to slash approximately 7,500 jobs globally as part of an extensive three-year cost-cutting strategy. Additionally, it plans to separate its ice cream business, which includes Wall’s, Ben & Jerry’s, and Magnum brands, into a standalone entity by the end of 2025.
Job Reductions and Cost-Cutting Strategy
The restructuring aims to streamline operations and focus on core activities, with job reductions expected to primarily affect office staff, constituting over 5% of the company’s 128,000-strong global workforce. This initiative targets savings of around €800 million (£684 million) over the next three years.
Impact on UK Operations
Unilever’s UK operations, employing 6,000 staff, are responsible for producing ice cream, Marmite, Bovril, and Pot Noodles. Despite generating €7.9 billion (£6.75 billion) in sales last year, the ice cream division operates differently from Unilever’s other consumer product lines due to its reliance on a frozen goods supply chain and seasonal demand.
Rationale Behind Ice Cream Business Separation
The decision to split off the ice cream business is aimed at simplifying operations and enhancing performance. Unilever’s chairman, Ian Meakins, emphasized the move’s potential to create a leading ice cream business with robust growth prospects.
Unilever’s Future Prospects
Following the announcement, Unilever’s shares surged by 5%. Analysts suggest that shedding the underperforming ice cream unit, likely through a demerger, could unlock shareholder value. While the company has not ruled out alternative options such as a direct sale, a demerger appears to be the preferred route, allowing shareholders to decide the fate of the new ice cream business.
