British consumer goods company Unilever revealed the plan as it looks to make savings of €800 million by 2027.
ADVERTISEMENTThe London-based company owns five of the world's top 10 selling ice cream brands including Wall's, Magnum and Ben & Jerry's, which delivered €7.9 billion in sales in 2023.
Announcing the plan, Unilever said the future growth potential of ice cream would benefit from a "different ownership structure".
The British consumer goods company, which is looking to save around €800 million by 2027, has also launched what it describes as a productivity programme involving technology investment.
"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," said CEO Hein Schumacher, who took over at Unilever last summer.
Victoria Scholar, head of investment at Interactive Investment, highlighted the pressure Unilever faces from investors and analysts to increase profit margins and maintain market share.
Thousands of office-based jobs to go
Scholar said: "Schumacher has been taking decisive action since taking to the helm, launching a €1.5 billion share buyback last month and committing to rebuild margin growth, which has come under pressure amid the backdrop of inflation following the pandemic and the war in Ukraine."
The plan is expected to result in around 7,500 job cuts primarily from office-based positions worldwide, out of the 128,000 employees. Some 1,500 jobs were cut in 2022.
Russ Mould, investment director at AJ Bell, cautioned that Unilever's move does not guarantee success, especially considering the challenges posed by inflation.
"Achieving underlying sales growth and margin improvement doesn't sound an overly ambitious goal but given the extent of price increases consumers have had to stomach thanks to inflation it may not be easy to achieve," Mould said.
"The danger for Unilever is that people are put off its branded goods because of the cost and they turn to cheaper supermarket own-brand alternatives. This risk is particularly acute in the West where quality unbranded goods are widely available. Unilever is in a stronger position in emerging markets where the same choice is not as freely available."
Meanwhile, the company's shares jumped 3.6% in morning trading on the London Stock Exchange.
