Unilever (UL) , the massive consumer goods company, is facing some financial headwinds, forcing it to make some major moves to try to drive stronger growth.
On Tuesday, Mar. 19, the company announced it would be laying off 7,500 employees worldwide from its staff of around 128,000. The move comes as Unilever said it is hoping to launch a "productivity program" and would invest in more technology to avoid redundancies in workforce roles.
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The British company estimates the move will save the €800 million or over $850 million.
Aside from layoffs, the company announce that it would also be spinning off its ice cream business, which includes iconic brands Ben and Jerry's and Magnum. The move allows Unilever — whose portfolio exists mostly of non-food brands like Dove and Vaseline — to shift its focus to more high growth category industries like beauty.
There's also a belief among some analysts that Unilever was looking to stray away from the activism that the Ben & Jerry's brand was participating in, which included support for LGBTQ+, Black Lives Matter, and migrant justice movements.
“A side benefit of the brand exiting Unilever’s portfolio is it might quieten the ‘go woke and go broke’ noise, but more widely the reasoning for the decision looks pretty sound,” said Russ Mould, investment director at AJ Bell, a financial services company, according to the AP.
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The ice cream unit of Unilever was still actually profiting, and according to Bloomberg, was still expected to generate about $1 billion in operating profit this year. But the company is hoping the strategy shift and layoffs will be more beneficial for it moving forward.
It could also mean that the company is slowly looking to move off of its other food brands, which includes Knorr, as it continues to focus on beauty and personal care.
Wall Street has reacted positively to Unilever's business shift so far with company's stock up a tick over 3% for the day as of this writing.
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