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) 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).
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