P&G to cut 5,700 jobs globally in restructuring
Consumer products maker Procter & Gamble Inc. said Thursday it plans to cut 5,700 jobs worldwide over the next year and a half as part of a cost-cutting plan.
The company's new plant in Box Elder County, however, will be unaffected by the layoffs because P&G does not plan to eliminate any manufacturing jobs as part of its effort to trim its workforce.
The Utah plant, opened last March, employs approximately 200 Utahns. It produces Charmin toilet paper and Bounty paper towels.
P&G says it plans to save $10 billion by the end of the fiscal year ending in June 2016.
The world's largest consumer products maker has experienced slowing sales volume in the U.S. as consumers continue to spend cautiously. The company also has faced high costs for fuel, packaging and other commodities.
In addition, as with other U.S. companies that do business in foreign markets, P&G isn't getting the same benefits from foreign currency exchanges that it enjoyed last year. When the dollar is weak, as it was for most of last year, revenue raised overseas translates into more dollars when converted at headquarters.
The cost-cutting plan is an attempt to address these problems, even as the company keeps up spending on initiatives it sees as key for its growth. These include marketing new products such as the single-unit Tide Pods in North America and expanding Oral B in Latin America.
The job cuts amount to about 10 percent of the company's non-manufacturing workforce, and are expected to be complete by the end of the fiscal year that ends June 2013. The cuts include 1,600 jobs that P&G announced earlier this month. P&G said that even though overall headcount will be reduced, hiring will continue in growth areas such as China or emerging markets.
Procter & Gamble CEO Robert McDonald announced the moves at the Consumer Analyst Group of New York conference in Boca Raton, Fla. The presentation was webcast.
Other parts of the cost-cutting plan include streamlining its operations and cutting costs related to packaging and materials. The moves will cost $3.5 billion in restructuring over a four-year period.
The company now expects adjusted net income in fiscal 2012 of $3.93 to $4.03 per share, from prior guidance of $4 to $4.10 per share. Analysts expect $4.06 per share, according to FactSet. The guidance reflects P&G's agreement to sell its Pringles business to Kellogg for $2.7 billion.
Shares rose $1.56, or 2.4 percent, to $66.
Tribune reporter Steven Oberbeck contributed to this story