- Procter & Gamble will cut approximately 7,000 jobs as part of a restructuring program that will also include exiting certain brands and markets.
- CFO Andre Schulten said more details will be shared on the company's fiscal fourth-quarter earnings call in July.
- Slowing growth in the U.S. and higher costs from tariffs are expected to weigh on the company's performance.
Procter & Gamble will cut 7,000 jobs, or roughly 15% of its nonmanufacturing workforce, as part of a two-year restructuring program.
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WATCH HEREThe layoffs by the consumer goods giant come as President Donald Trump's tariffs have led a range of companies to hike prices to offset higher costs. The trade tensions have raised concerns about the broader health of the U.S. economy and job market.
P&G CFO Andre Schulten announced the job cuts during a presentation at the Deutsche Bank Consumer Conference on Thursday morning. The company employs 108,000 people worldwide, as of June 30, according to regulatory filings.
P&G faces slowing growth in the U.S., the company's largest market. In its fiscal third quarter, North American organic sales rose just 1%.
Trump's tariffs have presented another challenge for P&G, which has said that it plans to raise prices in the next fiscal year, which starts in July. The company expects a 3 cent to 4 cent per share drag on its fiscal fourth-quarter earnings from levies, based on current rates, Schulten said. Looking ahead to fiscal 2026, P&G is projecting a headwind from tariffs of $600 million before taxes.
P&G, which owns Pampers, Tide and Swiffer, is planning a broader effort to reevaluate its portfolio, restructure its supply chain and slim down its corporate organization. Schulten said investors can expect more details, like specific brand and market exits, on the company's fiscal fourth-quarter earnings call in July.
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P&G is projecting that it will incur noncore costs of $1 billion to $1.6 billion before taxes due to the reorganization.
"This restructuring program is an important step toward ensuring our ability to deliver our long-term algorithm over the coming two to three years," Schulten said. "It does not, however, remove the near-term challenges that we currently face."
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SIGN UP P&G follows other major U.S. employers, including Microsoft and Starbucks, in carrying out significant layoffs this year. As Trump's tariffs take hold, investors are watching Friday's nonfarm payrolls report for May for signs of whether the job market has started to slow. While the government reading for April was better than expected, a separate reading this week from ADP showed private sector hiring was weak in May.
Shares of P&G fell more than 1% in morning trading on the news. The stock has dropped 2% so far this year, outstripped by the S&P 500's gains of more than 1%. P&G has a market cap of $407 billion.
