LONDON (AP) – Unilever, the maker of Ben & Jerry’s ice cream, Dove soap and Vaseline, said Tuesday it will cut 7,500 jobs and spin off its ice cream business into a separate company in a bid to cut costs and boost profits.
London-based Unilever said its ice cream business, which also includes Magnum bars, had “distinctive features” from other brands and would benefit from separate ownership to drive growth. The split is expected to be completed by the end of next year.
The 128,000-employee British consumer goods company also said it would launch a “productivity program” that would lead to the reduction of around 7,500 mainly office-based jobs worldwide.
Unilever said it would invest in technology to find efficiencies and avoid duplication, and said it expected to save 800 million euros ($867 million) over the next three years. The company also laid off 1,500 employees in early 2022.
“By simplifying our portfolio and driving productivity improvements, we can further unlock the potential of this business and position Unilever as one of the world’s leading consumer companies to deliver strong, sustainable growth and improved profitability.” This confirms our ambition to position ourselves as a global financial company,” said CEO Hein Schumacher. He took over the reins at Unilever last summer.
The company’s shares rose more than 3% in morning trading on the London Stock Exchange.
Director Richard Hunter said: “Despite a reputation for sound protection, stock prices have struggled to recover in the last year as investors remain nervous about companies with limited prospects for high growth and in need of streamlining. “It has helped to some extent to reverse the situation.” An online investment service for interactive investors.
The company, which makes Hellmann’s Mayonnaise, Ax Fragrances and Cif household cleaners, said it aims for mid-single-digit growth in underlying sales after spinning off its ice cream business.
Despite raising prices across its brands by an average of 13.3% in the same year, sales volumes in 2022 declined by 3.6%. Correspondingly, last year’s price increase was only 2.8%, while sales increased by 1.8%.
Some analysts said the split from Ben & Jerry’s, a company known for its social activism and at times at odds with management, could be another positive for Unilever.
Russ Mould, investment director at financial services firm AJ Bell, said: “A side benefit of the brand leaving Unilever’s portfolio is that it may quiet down the ‘I’ll wake up and go bankrupt’ noise. “More broadly, the reasons for this decision seem quite sound.” company.
He noted that the ice cream spinoff was not widely anticipated by the market, even though “political rhetoric from Ben & Jerry’s caused some investor meltdowns.”
Ben & Jerry’s has supported liberal issues such as LGBTQ+ rights, Black Lives Matter, justice for immigrants, and efforts to combat climate change.
In 2021, the brand announced it would stop selling ice cream in the Israeli-occupied West Bank and disputed East Jerusalem, territory sought by Palestinians.
Unilever subsequently announced that it would sell its interests in Ben & Jerry’s in Israel to an Israeli licensee, which would sell the product with Hebrew and Arabic labels. A U.S. judge rejected a lawsuit by Ben & Jerry’s seeking to block the plan in 2022.
Most recently, since the outbreak of the Israel-Hamas war, Ben & Jerry’s Independent Chairman of the Board Anuradha Mittal has called for a permanent ceasefire in Gaza.
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