Procter & Gamble to Cut 7,000 Jobs

Procter & Gamble will cut 7,000 jobs, or roughly 15% of its nonmanufacturing workforce, as part of a two-year restructuring program. The layoffs by the consumer goods giant come as President Donald Trump’s tariffs have led a range of companies to hike prices to offset higher costs. The trade tensions have raised concerns about the broader health of the U.S. economy and job market.

Background on Procter & Gamble

P&G CFO Andre Schulten announced the job cuts during a presentation at the Deutsche Bank Consumer Conference on Thursday morning. The company employs 108,000 people worldwide, as of June 30, according to regulatory filings. P&G faces slowing growth in the U.S., the company’s largest market. In its fiscal third quarter, North American organic sales rose just 1%.

Challenges Facing P&G

Trump’s tariffs have presented another challenge for P&G, which has said that it plans to raise prices in the next fiscal year, which starts in July. The company expects a 3 cent to 4 cent per share drag on its fiscal fourth-quarter earnings from levies, based on current rates, Schulten said. Looking ahead to fiscal 2026, P&G is projecting a headwind from tariffs of $600 million before taxes.

Restructuring Plans

P&G, which owns Pampers, Tide and Swiffer, is planning a broader effort to reevaluate its portfolio, restructure its supply chain and slim down its corporate organization. Schulten said investors can expect more details, like specific brand and market exits, on the company’s fiscal fourth-quarter earnings call in July. P&G is projecting that it will incur noncore costs of $1 billion to $1.6 billion before taxes due to the reorganization.

Impact on the Job Market

P&G follows other major U.S. employers, including Microsoft and Starbucks, in carrying out significant layoffs this year. As Trump’s tariffs take hold, investors are watching Friday’s nonfarm payrolls report for May for signs of whether the job market has started to slow. While the government reading for April was better than expected, a separate reading this week from ADP showed private sector hiring was weak in May.

Stock Performance

Shares of P&G fell more than 1% in morning trading on the news. The stock has dropped 2% so far this year, outstripped by the S&P 500’s gains of more than 1%. P&G has a market cap of $407 billion.

Conclusion

The restructuring program announced by Procter & Gamble is an important step towards ensuring the company’s long-term success, but it does not remove the near-term challenges that the company currently faces. The job cuts and restructuring plans are a response to the slowing growth in the U.S. market and the challenges posed by Trump’s tariffs.

FAQs

Q: How many jobs will Procter & Gamble cut?
A: Procter & Gamble will cut 7,000 jobs, or roughly 15% of its nonmanufacturing workforce.
Q: Why is Procter & Gamble cutting jobs?
A: The company is cutting jobs as part of a two-year restructuring program in response to slowing growth in the U.S. market and the challenges posed by Trump’s tariffs.
Q: What is the expected impact of the tariffs on Procter & Gamble’s earnings?
A: The company expects a 3 cent to 4 cent per share drag on its fiscal fourth-quarter earnings from levies, based on current rates.
Q: What is the expected cost of the restructuring program?
A: P&G is projecting that it will incur noncore costs of $1 billion to $1.6 billion before taxes due to the reorganization.
Q: How has the stock performed in response to the news?
A: Shares of P&G fell more than 1% in morning trading on the news.