P&G to cut 7,000 jobs as tariffs impact Tide detergent producer

Procter & Gamble Plans Job Cuts Amid Uncertain Market

Procter & Gamble is set to lay off 7,000 employees over the next two years as the company navigates a difficult spending landscape, partly influenced by US tariffs affecting various consumer businesses.

As part of a broader restructuring effort, the world’s largest consumer goods firm intends to step back from certain product lines and brands in specific markets, which may involve divestitures.

Executives at a recent Deutsche Bank Consumer Conference in Paris stated, “This isn’t a new strategy; it’s more of an intentional acceleration of our ongoing approach to succeed in an increasingly challenging environment.”

The layoffs represent roughly 6% of P&G’s workforce, which the company claims is aligned with its ongoing strategic initiatives.

During the conference, CFO Andre Schulten and operations head Shailesh Jejurikar described the geopolitical climate as “unpredictable,” adding that consumers are facing “greater uncertainty.” The administration’s tariffs on trading partners have stirred global markets, raising recession fears in the US.

P&G has projected a pre-tax impact of about $600 million for the fiscal year 2026 due to current tariff rates—a figure that continues to fluctuate.

A Reuters analysis indicated that the trade conflict has led to at least $34 billion in lost sales and increased costs for companies.

Earlier this year, P&G announced it would raise prices on certain products. Schulten mentioned the company is ready to “pull every lever” available to mitigate tariff impacts, primarily through higher prices and cost-cutting measures.

“The two-year timeframe gives them some leeway in terms of when and how deeply to implement these cuts, especially since the tariff situation remains fluid,” noted Christian Greiner, a senior portfolio manager at F/m Investments, which holds P&G shares.

The restructuring aims to streamline the organization by “broadening roles” and “reducing team sizes,” according to P&G.

Michael Ashley Schulman, chief investment officer at Running Point Capital, commented, “This kind of spring cleaning helps shed low-growth units and frees up resources to accelerate investment in key brands like Tide, Pampers, and Old Spice.”

In recent years, P&G has exited the Argentine market but restored operations in Nigeria. It has also divested the Vidal Sassoon hair care brand in China and several local brands in Latin America and Europe.

The company sources many raw materials, packaging, and some finished goods from China, though it has stated that about 90% of what it sells is made in the US.

As of June 2024, P&G employed around 108,000 people. The planned job cuts would roughly translate to 15% of its non-manufacturing workforce.

P&G anticipates pre-tax charges ranging from $1 billion to $1.6 billion over the two-year restructuring period, with a quarter of these charges expected to be non-cash.