Unilever Announces Plan to Reduce Workforce by 7,500 Jobs and Separate Ben & Jerry’s Ice Cream Division

Unilever Announces Plan to Reduce Workforce by 7,500 Jobs and Separate Ben & Jerry’s Ice Cream Division

Unilever, the consumer goods giant, said on Tuesday that it would cut 7,500 jobs and spin off its ice cream unit, which includes Ben & Jerry’s, to reduce costs and simplify its portfolio of brands.

The moves would make for “a simpler, more focused and higher performing Unilever,” Ian Meakins, the London-based company’s chair, said in a statement. The group’s ice cream unit generated 7.9 billion euros ($8.6 billion) in sales last year, or about 13 percent of the group’s total.

The division is home to Ben & Jerry’s, which Unilever acquired in 2000, along with other brands like Cornetto, Magnum, Talenti and Wall’s. The spinoff is expected to be completed by the end of 2025.

Hein Schumacher, who took over as Unilever’s chief executive in July, announced a plan late last year to “drive growth and unlock potential,” in part by focusing more attention on just 30 of the group’s hundreds of brands.

On Tuesday, he said that the job cuts and ice cream spinoff would “accelerate” the plan, saving nearly $870 million in costs over the next three years. The layoffs, of “predominantly office-based roles” around the world, amount to about 6 percent of Unilever’s work force.

After the split, Unilever’s remaining units would include health and beauty brands like Dove soap, consumer goods like Surf detergent and food brands including Hellmann’s mayonnaise.

Unilever rival Nestlé shifted many of its European ice cream brands to a joint venture with a private equity firm in 2016 and sold its U.S. brands, including Dreyer’s and Häagen-Dazs, to the venture in 2019.

Unilever has struggled in recent years, with revenue growth propped up by steep price increases as sales volumes have declined. Squeezed by inflation, consumers have been turning instead to cheaper brands in many of Unilever’s biggest categories, most notably less essential products like ice cream.

The ice cream division faced the highest input-cost inflation in Unilever’s portfolio last year, the company said in an earnings report last month. It passed on some of those costs to consumers, prompting them to buy less or switch to cheaper brands, leading to a “disappointing year with declining market share and profitability,” the company said.

“The company has tried accelerated cost-cutting for accelerated growth for at least a decade,” analysts at Bernstein wrote in a research note. “This plan remains ‘we will try harder’ to execute the same plan, or hope over experience,” they added. Unilever’s shares rose 3 percent on Tuesday, but have been roughly flat over the past year.

Ben & Jerry’s, which has been run by an independent board since its takeover by Unilever, has not always sat comfortably in the portfolio of a staid multinational corporation. The founders of the Vermont-based brand are outspoken on hot-button social and political issues; in 2021, they said that they would end sales in Israeli-occupied territories.

That led some U.S. pension funds to divest from Unilever and prompted a shareholder lawsuit. Ben & Jerry’s sued Unilever in 2022 to stop it from selling distribution rights to a licensee in Israel. Unilever eventually sold the rights to its longstanding local partner there, which continues to sell the ice cream with slightly different branding.

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