Procter & Gamble to cut 7,000 jobs over the next two years
Procter & Gamble has said it will cut six percent of its workforce, or 7,000 jobs, over the next two years as it undertakes a restructuring programme as tariffs raise costs and uncertainty for businesses and consumers.
The world's largest consumer goods company, which makes products ranging from Tide detergent to Pampers diapers, announced the job cuts on Thursday at a Deutsche Bank's Consumer Conference in Paris.
The Cincinnati, Ohio-based consumer goods giant also plans to exit some product categories and brands in certain markets, including some potential divestitures, as part of the broader two-year restructuring plan.
The restructuring will help simplify the organisational structure by 'making roles broader' and 'teams smaller', P&G said.
'The two-year window … gives them some flexibility in terms of timing and depth of cuts, as the tariff situation is very fluid,' said Christian Greiner, senior portfolio manager at F/m Investments that owns shares in P&G.
The company had about 108,000 employees as of June 2024. The job cuts would account for roughly 15 percent of its non-manufacturing workforce.
P&G expects to record charges of $1bn to $1.6bn before tax over the two-year period, with a quarter of the charges expected to be non-cash.
Chief Financial Officer Andre Schulten and operations head Shailesh Jejurikar, speaking at the Deutsche Bank conference, said that the geopolitical environment was 'unpredictable' and that consumers were facing 'greater uncertainty.'
In April, P&G said it would raise prices on some products, and Schulten said it was prepared to 'pull every lever' in its arsenal to mitigate the impact of tariffs, primarily through higher prices and cost-cutting.
The Pampers maker imports raw ingredients, packaging materials and some finished products into the United States from China. About 90 percent of what it sells is produced domestically, P&G has said.
President Donald Trump's sweeping levies on trading partners have shaken global markets and sparked concerns of a recession in the US.
P&G on Thursday estimated it would have about a $600m before-tax hit in its fiscal year 2026, based on current tariff rates, a number that has frequently shifted.
Overall, the trade war has cost companies at least $34bn in lost sales and higher costs, a Reuters analysis showed.
It is also affecting US consumer sentiment, which fell slightly in May for the fifth straight month, surprising economists. The preliminary reading of the University of Michigan's closely watched consumer sentiment index declined 2.7 percent on a monthly basis to 50.8, the second-lowest level in the nearly 75-year history of the survey. The only lower reading was in June 2022. Since January, sentiment has tumbled nearly 30 percent.
Shares of P&G were down about 2 percent in early trading. That has since ticked upward as of 11:15am ET (15:15 GMT), but it is still about 1 percent lower than yesterday's market close. P&G's stock has trended downward in the last five trading days by 2.7 percent and is down about 1.2 percent from the beginning of the year.
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