P&G Will Shed 5,700 Workers

by InvestorPlace Staff | February 23, 2012 2:37 pm

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[1]) announced plans today to lay off 5,700 employees[2]. 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[3] 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[4]) among the ranks of consumer-goods companies that have announced significant layoffs[5] recently. That’s in addition to 13,000 layoffs at now-bankrupt American Airlines parent AMR Corp. (PINK:AAMRQ[6]) and 1,600 more cuts at Morgan Stanley (NYSE:MS[7]).

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[8] to Diamond Foods (NASDAQ:DMND[9]) in favor of making a deal with Kellogg (NYSE:K[10]).

Endnotes:
  1. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  2. lay off 5,700 employees: http://www.reuters.com/article/2012/02/23/us-procter-idUSTRE81M1PR20120223
  3. webcast: http://news.pg.com/press-release/pg-corporate-announcements/correcting-and-replacing-pg-webcast-presentation-consumer-a
  4. PEP: http://studio-5.financialcontent.com/investplace/quote?Symbol=PEP
  5. significant layoffs: http://investorplace.com/2012/02/pepsico-to-cut-8700-workers/
  6. AAMRQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAMRQ
  7. MS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MS
  8. sell its Pringle’s brand: http://investorplace.com/2012/02/diamond-foods-procter-gamble-kellogg-dmnd-pg-k-pringles-deal/
  9. DMND: http://studio-5.financialcontent.com/investplace/quote?Symbol=DMND
  10. K: http://studio-5.financialcontent.com/investplace/quote?Symbol=K

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