As part of a major cost-cutting programme, Unilever has decided to spin out its ice cream division, known for brands such as Ben & Jerry’s, Magnum and Cornetto. In addition, some 7,500 jobs are at risk.
Different business model
Over the next three years, Unilever wants to save around 800 million euros in costs: the multinational says it wants to increase efficiency by standardising processes and reducing complexity. This could cost around 7,500 jobs in offices worldwide. In this way, the multinational wants to free up resources to invest to grow its top brands and improve margins.
A major – and not entirely unexpected – decision under this Growth Action Plan is the divestment of the ice cream division. This accounted for 7.9 billion euros in sales last year and has some of the world’s most popular ice cream brands under its belt, including Ben & Jerry’s, Cornetto and Magnum. The business model of this division is too different from that of the other categories in which Unilever operates, with strong seasonality, different sales channels and higher capital intensity.
A sale will benefit future growth for both Unilever and the ice cream division, the company says. The separation will take effect immediately and is expected to be fully completed by the end of 2025.
