P&G cutting more office jobs, up to 6,000 worldwide

April 27 09:34 2015

Procter & Gamble will cut another 3,000 to 6,000 office jobs worldwide in the next two years, senior executives said Thursday. An unknown number of cuts could occur here, where the company is headquartered and has only 90 manufacturing jobs. Details of the additional job cuts came as chief financial officer Jon Moeller updated analysts and reporters after the company posted lackluster financial results for P&G’s third quarter. P&G (PG) has been cutting thousands of jobs since February 2012 when it first announced it would slash 5,700 jobs or 10% of its nonmanufacturing jobs.635654679377246909-042415p-g1

In the past three years, P&G has cut a total of nearly 11,000 office jobs and another 10,000 manufacturing jobs worldwide. On Thursday, Moeller said P&G would end up cutting 25% to 30% of office jobs by mid-2017. The company already has cut 19% of those positions. P&G factories have achieved a net reduction in jobs despite a worldwide factory building boom, he said. The company plans at least another 18 projects for new or expanded plants overseas.

Moeller’s update built on previous job-cutting guidance that predicted 18% to 22% of nonmanufacturing jobs would be cut by the end of this fiscal year and that the company would target additional cuts of 2% to 4% a year going forward. P&G did not mention future manufacturing job cuts. The update came after P&G reported disappointing revenue results and lowered its sales outlook because of currency exchange rates and the strong dollar.

Foreign exchange shaved 8% off its sales results and divestitures of minor brands cut another 1%. P&G reported a $2.2 billion quarterly profit, a 17% decrease from the same period a year ago. The consumer products giant’s bottom line took a $300 million after-tax hit from a noncash charge against its Duracell batteries business that it is in the process of selling. Last year, P&G netted a $2.6 billion profit on $19.6 billion in sales during the third quarter.

Sales declined 8% to $18.1 billion for P&G’s fiscal third quarter ended March 31. Organic sales, which exclude the effect of foreign exchange, divestitures or acquisitions, rose 1%. P&G’s 92 cents of core earnings per share were in line with analyst estimates, but its sales fell short. P&G lowered its sales guidance for the fiscal year ending June 30: Sales will be down 5% to 6% vs. a February forecast that said sales would decline 3% to 4%. The company said organic sales would climb in the low single digits instead of an increase in the low-to-mid single-digit range outlined in January.