Unilever spinning off ice cream business, cutting jobs
Consumer goods giant Unilever (UL) has unveiled a strategic restructuring plan that includes the spinoff of its iconic ice cream business. The company has also announced its intention to streamline operations by cutting 7,500 employees from its global workforce.
Yahoo Finance's Josh Lipton and Alexandra Canal discuss the trending ticker.
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Editor's note: This article was written by Angel Smith
Video Transcript
AEXANDRA CANAL: Another stock we're watching today is consumer goods giant Unilever unveiling a strategic restructuring plan. The company announcing a spinoff of its iconic ice cream business, while also trimming down its global workforce. So that ice cream business being Ben and Jerry's, Magnum Bars spinning off. I love me a good Ben and Jerry's Half Baked all day. But this is a company that really wants to--
JOSH LIPTON: That is a delicious [INAUDIBLE].
AEXANDRA CANAL: Oh, it's the best one. 100%. But they have a lot of brands under their umbrella there. They have Dove soap, Vaseline. They've been really wanting to simplify their portfolio. Now they are cutting 7,500 jobs as a result of this restructuring. They're going to be targeting underlying sales growth of mid-single digits after spinning off the ice cream business.
And the company's had limited growth prospects, in many ways. Investors have been looking for them to streamline. There's also the social activism element of all of this, with Ben and Jerry's sometimes being at odds with Unilever, so you wonder how much that played into things, potentially.
JOSH LIPTON: Yeah, I mean, you touched on exactly the point. I mean, Ben and Jerry's is a very politicized company. And your pint of Cherry Garcia, Allie, it has very strong political opinions on all manner of policy, domestic and foreign. And that constantly created a lot of just drama and headaches and lawsuits.
So, you can understand-- did that play into this? Who knows? I mean, I think, more broadly, this is a CEO who wants to boost profits, wants to drive growth. He looks at this ice cream arm. And yes, I think they did about 9 billion in sales in 2023. But profit margins, they are not as attractive relative to other parts of the business. So you can understand why, at least financially and strategically, why that makes sense.
AEXANDRA CANAL: Yeah, yeah, and I personally love Ben and Jerry's. And it's an ice cream that I frequent often, but I do wonder if it made sense within this company. So it'll be interesting to see.
JOSH LIPTON: The CEO also had questions.
AEXANDRA CANAL: Oh, yes, yes. And I have asked the Ben and Jerry's CEO before, like, do you want to have any healthier options with the Ozempic craze, everything going on? And at the time, they said they want to stick to their guns.
JOSH LIPTON: Stick with what they know.
AEXANDRA CANAL: Sticking with what they know.
JOSH LIPTON: Politics and ice cream.
AEXANDRA CANAL: Exactly.
