Unilever is cutting jobs and divesting its ice cream unit

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By journalsofus.com

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Rainy summer in Europe meant a decline in ice cream sales

Marmite and Dove soap owner Unilever is to cut around 7,500 jobs worldwide as part of a wider three-year cost-saving plan.

The group also said it would spin off its ice cream business which includes the Wall’s, Ben & Jerry’s and Magnum brands.

The food and home goods giant said the spin-off will begin immediately and should be completed by the end of 2025.

Unilever said the change would help it “do less things better”.

Unilever said the job cuts would affect mostly office workers, representing more than 5% of its 128,000 global workforce, and it aimed to save around €800m (£684m) over the next three years.

Unilever employs 6,000 staff in the UK, including production of ice cream in north-east Gloucestershire, Marmite and Bovril in Burton-on-Trent, and pot noodles in Newport.

The ice cream division, whose other brands include Viennetta, Carte d’Or, Cornetto and Breyers, achieved global sales of €7.9bn (£6.75bn) last year.

However, Unilever said the business had less in common with its other consumer product lines because it required a supply chain of frozen goods and it was more seasonal.

Company chairman Ian Meakins said, “The separation of the ice cream and the delivery of the productivity program will help create a simpler, more focused and higher performing Unilever.”

“It will also create a world-leading ice cream business, with strong growth prospects and an exciting future as a standalone business.”

Unilever shares rose 5% after the announcement.

Matt Britzman at Hargreaves Lansdown said the move was “not a huge blow” as the ice cream unit was not performing well.

The entity will most likely be liquidated in a demerger, which would mean that current shareholders would receive shares in a newly listed entity. However the group said it was not ruling out other options such as an outright sale of the business.

“There doesn’t appear to be a buyer lined up, so it looks like separation would be the option,” Mr. Britzman said. “Investors can then decide whether they want to retain the new ice cream business or sell it into the market.”

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