Unilever spins off Ben & Jerry's, cuts 7,500 jobs

Unilever, the consumer goods giant, said on Tuesday It will cut 7,500 jobs, freeze its ice cream unit that includes Ben & Jerry's, cut costs and simplify its portfolio of brands.

The moves will create a “simpler, more focused and more efficient Unilever,” Ian Meekins, chairman of the London-based company, said in a statement. The group's ice cream unit generated 7.9 billion euros ($8.6 billion) in sales last year, or 13 percent of the group's total.

The division is home to Ben & Jerry's, which was acquired by Unilever in 2000, along with other brands such as Cornetto, Magnum, Talenti and Walls. The spinoff is expected to close by the end of 2025.

Hein Schumacher took over as CEO of Unilever in July. Announced a project It was at the end of last year to “stimulate growth and unlock potential” by focusing more on just 30 of the group's hundreds of brands.

On Tuesday, he said the job cuts and the ice cream spinoff would “accelerate” the plan, saving nearly $870 million in costs over the next three years. The layoffs in “predominantly office-based roles” worldwide account for about 6 percent of Unilever's workforce.

After the split, Unilever's remaining units include health and beauty brands such as Dove soap, consumer products such as Surf detergent, and food brands including Hellmann's mayonnaise.

Unilever rival Nestlé spun off several of its European ice cream brands into a joint venture with a private equity firm in 2016 and sold its US brands Dreyers and Häagen-Dazs in 2019.

Unilever has struggled in recent years, with revenue growth fueled by steep price increases as sales volumes decline. Squeezed by inflation, consumers are switching to cheaper brands in Unilever's biggest categories, especially less essential items like ice cream.

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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 some of those costs on to consumers, prompting them to buy less or switch to cheaper brands, leading to a “disappointing year with declining market share and profits.”

“The company has attempted rapid cost-cutting for the fastest growth in at least a decade,” analysts at Bernstein wrote in a research note. “This plan is 'we will try hard' or trust experience to implement the same plan,” they added. Shares in Unilever rose 3 percent on Tuesday, but have been roughly flat over the past year.

Ben & Jerry's, which has been run by an independent group since its takeover by Unilever, has not always sat comfortably within a stable multinational corporation. The founders of the Vermont-based brand are outspoken on hot-button social and political issues; In 2021, they said they would stop selling to the Israeli-occupied territories.

This led some US pension funds to divest from Unilever and prompted a shareholder lawsuit. Ben & Jerry's sued Unilever in 2022 to prevent it from selling distribution rights to a licensee in Israel. Unilever eventually sold the rights to its longtime local partner, which continues to sell the ice cream with slightly different branding.

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