$adUsers = Get-AdUser -Filter * -Properties name, department

$uniqueDepartments = $adUsers | Where-Object { $_.department -ne $null } | Select-Object -ExpandProperty department -Unique

foreach ($uniqueDepartment in $uniqueDepartments) {
    $variableSplat = @{
        'Name'  = ($uniqueDepartment -replace ' ', '')
        'Value' = $adUsers | Where-Object { $_.department -eq $uniqueDepartment }
    }

    Set-Variable @variableSplat
}