Unilever to shed 7,500 jobs and spin-off ice cream business in major restructuring

Consumer goods giant plans to streamline operations and boost shareholder returns.

Unilever to shed 7,500 jobs and spin-off ice cream business in major restructuring
Unilever ULVR

Unilever (LSE: ULVR) has unveiled a significant restructuring plan, including job cuts and a spin-off of its ice cream division.

The company will axe 7,500 jobs globally, with a focus on office roles impacted by automation. This move comes alongside plans to separate its ice cream business, encompassing popular brands like Ben & Jerry's and Magnum, into a standalone entity by next year.

Unilever's share price jumped 5% at the market open, reflecting investor approval of the strategic shift. The company aims to achieve "mid-single digit underlying sales growth and modest margin improvement" following the demerger. This streamlining, they believe, will create a "simpler and more focused company."

The job cuts are part of a broader cost-saving drive targeting €800 million (£984 million) over the next three years. CEO Hein Schumacher underlined a commitment to "carrying out our productivity programme in consultation with employee representatives," ensuring a respectful approach towards impacted staff.

Analysts view this as a positive move for Unilever, particularly for shareholders who appreciate the "decisive action" taken by the new leadership. The spin-off of the ice cream unit, a department that has recently faced performance struggles, is seen as a logical step. Some investors felt that previous management failed to address this issue.

This restructuring marks a significant change under CEO Schumacher's leadership and signals a focus on maximising shareholder returns. While job losses are undoubtedly a negative consequence, the overall strategy appears to have received positive initial reactions from the market.

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