By Rudy Blalock
Procter & Gamble, the world’s largest consumer goods company, on June 5 announced a plan to eliminate 7,000 jobs and exit select brands and product categories as it navigates a challenging global environment marked by consumer uncertainty and volatile trade conditions, according to a company news release.
The Cincinnati-based maker of Tide, Pampers, and Old Spice will carry out the job reductions over the next two fiscal years, targeting roughly 15 percent of its non-manufacturing workforce, or about 6 percent of its total global headcount, according to the company.
The cuts are part of a larger restructuring initiative designed to accelerate productivity and simplify the organization, as P&G faces unpredictable geopolitical conditions and shifting consumer behaviors, the company said following a presentation at the Deutsche Bank Global Consumer Conference in Paris.
“This is not a new approach, rather an intentional acceleration of the current strategy … to win in the increasingly challenging environment in which we compete,” executives stated in their announcement.
Tariffs and Trade Tensions
The announcement comes as P&G and other multinational firms contend with the fallout from U.S. tariffs on trading partners, which have affected global supply chains and heightened recession fears in the United States.
P&G estimates that current tariff rates will result in a $600 million before-tax hit in its fiscal year 2026, with Christian Greiner, senior portfolio manager at F/m Investments, which owns shares in P&G, noting that rates have been “very fluid” in recent months.
The company in its announcement described the geopolitical environment as “unpredictable,” with consumers facing “greater uncertainty.”
In April, CFO Andre Schulten said to offset the impact of tariffs, P&G would raise prices on some products and is prepared to “pull every lever” in its arsenal, including further cost-cutting and price adjustments.
Strategic Exits and Portfolio Simplification
As part of its restructuring, P&G will exit certain product categories and brands in specific markets, potentially including divestitures. While details on which brands or markets will be affected have not been disclosed, the company said that these moves are intended to focus resources on its core brands and drive efficiencies across its supply chain.
“These portfolio moves enable the business to make related interventions in our supply chain—right-sizing and right-locating production to drive efficiencies, faster innovation, cost reduction and even more reliable and resilient supply,” the press release stated.
Financial Implications and Market Response
P&G expects to record between $1 billion and $1.6 billion in before-tax charges related to the restructuring over the two-year period, with about a quarter of those charges expected to be non-cash.
The company’s shares fell about 1 percent in early trading following the announcement and have remained largely flat over the past year.
Despite the restructuring, P&G highlighted its continued strong financial performance, noting six consecutive years of at least 4 percent organic sales growth and consistent returns to shareholders, including a recent 5 percent dividend increase—the 69th consecutive annual hike.
Looking Ahead
Executives at the conference said that the restructuring is aimed at enhancing agility, broadening roles, and making teams smaller and more efficient, with a focus on leveraging digitization and automation.
“Taken together, each of these actions is intended to widen P&G’s margin of advantage in superiority leading to growth and value creation,” the company stated.
The company pledged to manage employee separations “with support and respect, and in line with our principles and values and local laws,” according to the release.
Reuters contributed to this report.
From NTD News
