P&G to cut 5,700 jobs in massive restructuring
Bob McDonald, CEO of Procter & Gamble, says that the company will cut 5,700 jobs in a push to reduce costs by $10 billion over the next few years.
Procter and Gamble Inc. (P&G), the world's largest consumer products company, said Thursday that it will cut 5,700 non-manufacturing jobs over the next 18 months, the Associated Press reported.
The figures represent about 10 per cent of the company's non-manufacturing workface and include job cuts announced last month.
The Cincinnati-based maker of Tide, Charmin, Bounty, among hundreds of other brands, currently employs about 129,000 people worldwide, of which 57,000 are non-manufacturing.
The move comes as a part of a cost-cutting plan that seeks to save the company $10 billion over the next four years after disappointing sales growth in North America and Europe and the rising cost of raw materials.
P&G has also been plagued with manufacturing and logistical missteps lately, particularly in emerging markets, reported Reuters.
“We realize that we have to do it,” CEO Bob McDonald said during a meeting with Wall St. analysts in Boca Raton, Fl. the Wall Street Journal reported. “The environment necessitates it.”
The job cuts are likely to save the company about $800 million.
The company said that other savings will come from scaling back advertising, cutting down on duplicate work, using less expensive packaging, and working more with virtual techonologies or outside companies, the Associated Press reported.
According to the Financial Times, P&G's cuts could boost its profit margin by 9.5 percentage points.