Shares of Unilever (UL) climbed 4% in premarket trading Tuesday following the announcement that it plans to spin off its ice cream division, which includes popular brands like Ben & Jerry’s and Magnum.
This move is part of a larger restructuring initiative that will affect 7,500 jobs.
“The proposed changes are expected to impact around 7,500 predominantly office-based roles globally, with total restructuring costs now anticipated to be around 1.2% of Group turnover for the next three years (up from the around 1% of Group turnover previously communicated),” a statement said.
The separation process is set to start immediately, with completion targeted by the end of 2025, according to the company's statement.
The London-based consumer goods giant aims for mid-single-digit sales growth and a modest margin improvement post-separation. Moreover, Unilever has initiated a cost-saving program expected to result in approximately 800 million euros ($869 million) in savings over three years.
CEO Hein Schumacher, who outlined plans to simplify Unilever's operations last October, seeks to refocus the company on 30 key brands, which represent 70% of its sales.
This strategy marks a shift from the previous management, which had expanded Unilever's brand portfolio to around 400.
Schumacher, who took over in July, has emphasized improving gross margins and avoiding significant acquisitions. He said last month he would not shy away from making tough decisions to enhance efficiency, such as streamlining Unilever’s workforce of 127,000 employees.
"The changes we are announcing today will help us accelerate that plan," he said on Tuesday.