David Holthaus reports:
Procter & Gamble will cut its workforce by 5,700 jobs by the end of June 2013, the company said Thursday.
The cuts will include the 1,600 jobs the company already announced will be eliminated through an early retirement program.
That leaves 4,100 jobs to be trimmed through a combination of layoffs, attrition, and selective hiring, the company said.
The cuts will come in P&G’s non-manufacturing operations, including marketing, product design, logistics and research. P&G would not say how the cuts would affect employment in Cincinnati, its headquarters city, where it employs about 12,000. Its Mason Business Center employs about 2,400.
The job cuts are part of $10 billion in savings the company wants to achieve by 2015, as it deals with little or no sales growth in the United States and Europe, rising costs of raw materials, including fuel, and volatile overseas markets.
“We realize that we have to do it,” CEO Bob McDonald said. “The environment necessitates it.”
Other savings will come from cutting back on TV advertising, using less expensive packaging, eliminating duplicate work and creating more partnerships with outside researchers to develop new products.
“This will make us more agile and more fast-moving as an organization,” McDonald said.
His announcement came on Thursday at a conference of Wall Street analysts in Boca Raton, Fla.
The cuts announced Thursday do not include the 1,700 jobs worldwide that belong to its Pringles business, which is being sold. That sale, to Kellogg Co., could be become final by the end of June.
P&G plans to use some of the savings to invest in still-developing markets where its sales are growing, places such as Brazil, China, and India. With its sales in the United States and Europe, its most lucrative markets, flat in the last two years, some Wall Street analysts have been calling for swifter, deeper cost-cutting from the Cincinnati-based giant.
Wall Street responded positively to the cost-savings announcement, sending P&G stock up 2.8 percent in mid-afternoon trading to $66.24.
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