P&G To Cut Even More Jobs
By Mae Anderson
NEW YORK -- Consumer products giant Procter & Gamble Co. said Thursday that it plans to cut more jobs and increase share repurchases as it works on its turnaround plan to focus on its most profitable categories and countries. The news comes as the company holds its annual analyst meeting in Cincinnati, and as P&G faces increasing investor pressure to improve its results.
The maker of Tide detergent and Gillette razors, P&G says that on top of its already announced plan to cut 10 percent of its non-manufacturing jobs, or 5,700 jobs, by the end of its fiscal year in June 2013, it plans to continue to reduce its non-manufacturing jobs by 2 percent to 4 percent between 2014 and 2016. It will continue to hire in other areas, however.
P&G also said it now expects to buy back $4 billion to $6 billion of its shares. Previously it forecast $4 billion.
P&G has admitted to missteps in pricing and in balancing growth in emerging markets, which account for about 38 percent of its sales, amid an uncertain global economy and lackluster market share growth overall.
In May, P&G announced a plan to focus on its 40 top businesses, 20 biggest new products and 10 most profitable emerging markets, as it is undergoes a cost-cutting plan aimed at saving $10 billion by fiscal 2016.
The pressure is on since activist investor William Ackman, known for agitating for change in companies he has a stake in, has disclosed that he has a 1 percent stake in Procter & Gamble.
P&G affirmed its forecast for the fiscal second quarter and fiscal year. It predicts second-quarter adjusted core earnings of $1.07 to $1.13 per share with revenue ranging from down 1 percent to up 1 percent, implying revenue $21.88 billion to $22.32 billion. Analysts expect net income of $1.11 on revenue of $21.81 billion.
For the full year P&G kept its guidance for adjusted core earnings of $3.80 to $4 on flat revenue growth to up 1 percent. That implies $83.68 billion to $84.52 billion. Analysts expect net income of $3.96 per share on revenue of $84.20 billion.
Shares fell 21 cents Thursday to close at $66.32.
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