General Motors (GM) scores earnings beat, but big revenue miss >>> READ MORE

P&G Will Shed 5,700 Workers

Many of the cuts will be in its huge marketing department


On the heels of the Labor Department’s latest tally of new jobless claims (steady at 351,000 for the latest week), Procter  & Gamble (NYSE:PG) announced plans today to lay off 5,700 employees. That would be about 10% of the consumer-products’ giant’s total worldwide workforce. P&G expects to make the cuts by June 2013.

P&G CEO Robert McDonald laid out the company’s plan during a webcast from the Consumer Analyst Group of New York conference in Boca Raton, Fla. The positions being eliminated are nonmanufacturing jobs, many of which will be from marketing. P&G has long been one of the world’s biggest advertisers, hawking products ranging from Tide laundry detergent to Scope mouthwash to Duracell batteries.

However, with the ever-increasing rise of digital media and social networks, P&G is now able to realize similar or greater consumer reach at lower cost, and with fewer employees doing that work, company executives said.

P&G joins PepsiCo (NYSE:PEP) among the ranks of consumer-goods companies that have announced significant layoffs recently. That’s in addition to 13,000 layoffs at now-bankrupt American Airlines parent AMR Corp. (PINK:AAMRQ) and 1,600 more cuts at Morgan Stanley (NYSE:MS).

Despite the bad news for the affected P&G workers, investors greeted the job-cutting news positively, pushing P&G shares up some 2.75% on Thursday to $66.21 in afternoon trading.

Procter & Gamble has been busy on other fronts recently as well. Just last week it ended talks to sell its Pringle’s brand to Diamond Foods (NASDAQ:DMND) in favor of making a deal with Kellogg (NYSE:K).

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC