Unilever (NYSE:UL) will undergo layoffs and cut about 7,500 jobs. It plans on spinning off its ice cream business in the process.
The packaged goods giant, based in England, has been from activist investor Nelson Peltz to streamline itself.
Shares rose 2.7% on the news overnight. Unilever was due to open this morning at $49.87 per share, its market capitalization about $125 billion, on 2023 revenue of .
Peltz’ Lever
Unilever issued what it called results for its fourth fiscal quarter, a 3% drop in revenue and falling market share. It said it would slow down price hikes to make up for that.
Peltz got into Unilever through his Trian investment vehicle , taking a board seat. He in early 2023. Over the last two years Unilever stock is up just 7%.
The hope is will shake things up. Unilever will spin off its ice cream business, with sales of nearly $9 billion. Ben & Jerry’s gets the headlines here, but Unilever also owns .
The layoffs, covering almost 6% of its 128,000 workers, are called a ” They are expected to save about $900 million over three years. The cost of the layoffs is estimated at 1.2% of turnover.
Unilever CEO Hein Schumacher joined the company . His current contract could earn him almost $19 million if he hits profit targets. His salary is about $10 million, but he missed last year’s targets, dropping his bonus from 150% of his salary to 115%. Schumacher said that Peltz approves his plans.
Unilever Layoffs: What Happens Next?
Packaged goods are a mature industry, and cover it. Morgan Stanley recently on the stock from equal weight to underweight.
The main reason to hold the stock is its dividend, a 46.5 cent/quarter payout currently yielding 3.8%.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
