Procter & Gamble Announces Major Job Cuts
Procter & Gamble (P&G) is set to reduce approximately 7,000 positions, which represents about 15% of its non-manufacturing workforce, as part of a comprehensive two-year restructuring plan. This strategic move aims to enhance the company’s long-term operational efficiency amid a challenging economic environment.
Restructuring Driven by Market Challenges
The decision to downsize comes amid slowing growth in the United States, P&G’s largest market, where North American organic sales increased by only 1% in the most recent fiscal quarter. Additionally, rising costs associated with tariffs have pressured the company’s financial performance.
Chief Financial Officer Andre Schulten highlighted that tariff-related expenses might reduce the company’s fiscal fourth-quarter earnings by 3 to 4 cents per share. For fiscal year 2026, P&G anticipates a tariff-related headwind of $600 million before taxes.
Portfolio Optimization and Supply Chain Restructuring
Beyond workforce reduction, P&G plans to undertake a thorough evaluation of its product portfolio, including exiting certain brands and markets. The company also intends to restructure its supply chain and streamline its corporate organization to adapt more effectively to evolving market conditions.
Investors can expect additional specifics regarding brand and market exits during the fiscal fourth-quarter earnings call scheduled for July. The company expects to incur non-core costs ranging from $1 billion to $1.6 billion before taxes related to the reorganization efforts.
Implications and Broader Industry Context
This restructuring initiative reflects P&G's commitment to sustaining its long-term growth trajectory despite near-term difficulties. The move parallels similar workforce reductions across major U.S. corporations as trade tensions and economic uncertainties continue to affect business operations.
On the announcement, P&G’s shares experienced a decline of over 1% in morning trading, reflecting investor caution amid the restructuring news. The company currently holds a market capitalization of $407 billion.
Key Takeaways
- 7,000 jobs to be cut, accounting for about 15% of non-manufacturing employees
- Anticipated tariff impact of $600 million before taxes on fiscal 2026 earnings
- Non-core restructuring costs expected between $1 billion and $1.6 billion
- Slowed sales growth in the U.S. market, with North American organic sales up just 1% recently
- Additional brand and market exit details to be released in upcoming earnings call
