Unilever to cut 7,500 jobs as it splits off ice cream arm

Unilever will spin out its ice cream division and slash around 7,500 jobs worldwide as it seeks to become a “leaner and more accountable” business.

The move will impact ice cream brands such as Magnum, Ben & Jerry’s, Wall’s and Cornetto, with the “full separation” from the group expected by the end of 2025.

The decision is designed to help the development of the ice cream brands, which it said had “distinct characteristics” compared to other divisions, with Unilever believing the changes would “create a world-leading business” and “drive stronger performances”.

The overhaul was announced to help “accelerate its Growth Action Plan”, launched by Unilever’s new chief executive Hein Schumacher last year. It launched what it termed a “productivity programme”, which aims to drive “focus and faster growth through a leaner and more accountable organisation, enabled by investment in techology”.

As part of the plan, 7,500 predominantly office-based roles will be cut. Unilever expects the productivity plan to deliver total cost savings of around £630.5m (€800m) over the next three years.

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The FMCG expects to have a “structurally higher margin” after the ice cream split off and productivity plan, and predicts mid-single digit underlying sales growth and “modest” margin improvement post-separation.

Unilever said Ian Meakins said: “The board is determined to transform Unilever into a higher-growth, higher-margin business that will deliver consistently for all stakeholders. Improving our performance and sharpening our portfolio are key to delivering the improved results we believe Unilever can achieve.”

“The separation of Ice Cream and the delivery of the productivity programme 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.”

Schumacher added: “Under the Growth Action Plan we have committed to do fewer things, better, and with greater impact. The changes we are announcing today will help us accelerate that plan, focusing our business and our resources on global or scalable brands where we can apply our leading innovation, technology and go-to-market capabilities across complementary operating models.

“Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability.”

The changes follow the Ice cream division’s underwhelming performance in Unilever’s full-year results last month. Schumacher said at the time that the FMCG’s competitiveness was “disappointing” and that overall performance needed to improve.