Procter & Gamble Announces Massive Layoffs: 7,000 Jobs to be Cut Over the Next Two Years
Global consumer goods giant Procter & Gamble announced at the Deutsche Bank Consumer Conference in Paris this week that it will cut about 7,000 jobs worldwide over the next two years. This layoff plan is part of a broader restructuring strategy aimed at improving operational efficiency and addressing the constantly changing market environment.
According to P&G's disclosed data, as of June 2024, the company has a total workforce of about 108,000 employees. This layoff represents about 6% of the total number, with non-manufacturing employees accounting for 15%.
Trump Tariffs a Factor in Layoffs
This restructuring measure comes amid heightened global business environment uncertainty, particularly with the tariff policies reinstated by U.S. President Trump further disrupting the market. P&G's CFO Andre Schulten and COO Shailesh Jejurikar pointed out at the conference that the current geopolitical situation is "unpredictable," combined with weak consumer confidence, forcing companies to be more flexible and decisive in their business decisions.
According to P&G's estimates, if the current tariff policies remain through the 2026 fiscal year, the company's pre-tax profit will reduce by an additional $600 million. Investors have also noted the frequent changes in Trump's tariff measures against major trade partners, making it difficult for companies to accurately predict future cost pressures.
Christian Greiner, Senior Portfolio Manager at F/m Investments, believes, "P&G's choice to phase layoffs over two years is precisely to allow for operational flexibility in response to tariff uncertainties."
Divesting Non-Core Businesses to Free Up Resources
In addition to layoffs, P&G will exit some low-growth markets and brand lines, accelerating the divestment of non-core businesses. Executives stated that the company will "expand job responsibilities" and "reduce team size" to achieve the goals of streamlining the organizational structure and concentrating resources.
In recent years, P&G has gradually withdrawn from the Argentine market, restructured its Nigeria business, and sold its Vidal Sassoon haircare business in Greater China. Simultaneously, the company has sold several local brands in Latin America and Europe to free up more resources to support core products such as Tide laundry detergent and Pampers diapers.
Michael Ashley Schulman, CIO of Running Point Capital, noted, "Divesting low-growth businesses not only releases cash but also helps strengthen P&G's leadership in its core consumer brand areas."
Raising Prices and Cutting Costs to Mitigate Tariff Impact
Facing rising cost pressures, P&G also plans to alleviate the impact of tariffs through two approaches: raising prices and cutting expenses. In April, the company announced that it would raise prices on some product lines to offset some cost pressures.
P&G's executives stated, "This is not a new strategy, but rather an accelerated execution of the current strategy. We are proactively adjusting to ensure we maintain leadership in a more challenging market environment."
Global Companies Affected by Trump's Tariff Shockwave
Media reports indicate that since Trump launched a new round of global trade wars, global companies have accumulated sales losses and additional costs exceeding $34 billion due to tariffs. As a key player in the global consumer goods market, P&G's response strategy may serve as an important reference for the industry in observing how multinational companies adapt to changes in trade policies.
