The company said a range of options will be considered for the separation, with a demerger that creates a newly listed business being the most likely option.
Unilever, which also owns Hellmann’s mayonnaise and Domestos cleaners, said the ice cream division had sales of €7.9 billion (US$8.6 billion) in 2023.
It said the move is part of a broader restructuring as Schumacher tries to jumpstart growth.
Unilever said the job cuts, which will affect mainly office-based roles, are part of a plan to achieve €800 million in cost savings over the next three years.
Unilever shares have fallen 6.6% over the past year.
Schumacher took over from Alan Jope last year after activist investor Nelson Peltz took a stake in the consumer-goods conglomerate and joined its board following a botched effort to buy GSK Plc’s consumer health division.
Four Businesses
The restructuring will leave the company focused on four businesses, including beauty and wellbeing, personal care, home care, and nutrition.
Rival Nestle SA previously separated its ice cream business by setting up a joint venture with private equity firm PAI Partners.
The separation of the ice cream unit will remove a long-running headache for Unilever, which has faced controversies surrounding political stances taken by Ben & Jerry’s.
In December 2022, Unilever settled a court battle with Ben & Jerry’s independent board over the licensing of the brand in the Israeli-occupied West Bank.
“We believe a separation of ice cream makes sense given its slower profile and lack of cost synergies due to its cold supply chain,” said RBC Capital Markets analyst James Edwardes Jones.
Cost Savings
“If the proposed cost savings boost profits, the company will be able to reinvest in research and development and marketing,” he said.
Unilever’s revenue grew 4.7% in the final quarter of 2023, just ahead of analysts’ estimates, as the volume of products sold increased for the first time since 2021.
That followed a period when consumers, hit by the highest inflation in decades, were shifting away from branded products to buy more private-label goods.
Schumacher, who joined Unilever from dairy cooperative Royal FrieslandCampina, in October, set out a plan to revitalise growth at Unilever, pledging to focus investment on its top 30 brands, which represent around three-quarters of revenue.
“The separation of the ice cream business is expected to start immediately and should be complete by the end of next year,” Unilever said.