Procter & Gamble (P&G) is set to slash 7,000 jobs as part of a cost-cutting initiative to manage tariff pressure and global economic challenges.
The job cuts at the consumer goods giant behind Pampers, Olay and Head & Shoulders will affect non-manufacturing roles.
This is a reduction of approximately 15% of its current workforce over the next two years.
“As always, employee separations will be managed with support and respect, and in line with our principles and values and local laws,” P&G said in a statement.
“Plans will be implemented over the next two fiscal years, allowing us to appropriately sequence the delivery of important innovation and operational projects.
“As we do this, our top priority remains delivering balanced growth and value creation to delight consumers, customers, employees, society and shareowners alike.”
The decision comes amid plans to shore up the consumer giant's profitability, which includes better meeting unserved and under-served consumers and expanding into new segments.
“In North America, we estimate there is up to US$5bn dollars of market potential in our categories simply by growing household penetration of our brands among currently unserved and under-served consumers,” the statement from P&G continued.
“In Europe, driving consumption and growing markets across the region to best-in-class levels – while just maintaining current market share in our existing categories — is more than a $10bn opportunity.”
In April, P&G warned of likely price hikes to manage the impact of US President Donald Trump’s trade tariffs.
The company is expecting it to take a hit of between $1bn and $1.5bn from the trade war and a slowdown in consumer spending due to economic uncertainty.
"We will have to pull every lever we have in our arsenal to mitigate the impact of tariffs within our cost structure and P&L,” said P&G CFO Andre Schulten on a call discussing its third quarter financial results.
Increasing prices and cutting costs were the most likely options, but changing product formulations or sourcing raw materials from outside China were also a consideration.
P&G imports raw ingredients, packaging materials and some finished products into the US from China, but around 90% of products sold are produced domestically.