Layoffs, Attrition, and Buyouts Slash P&G Jobs
Cincinnati-based consumer goods conglomerate Procter & Gamble Co (NYSE:PG) trimmed its workforce by nearly 9.5% over the last fiscal year, which ended on June 30. According to the company’s 2017 annual report, the manufacturer cut its employee headcount from 105,000 employees in 2016 to 95,000 employees in 2017.
Part of this drop occurred after P&G split 41 beauty brands from its product portfolio in October 2016. Those brands were sold off to Coty Inc (NYSE:COTY), a New York-based cosmetics company. As part of the deal, 200 employees working for these P&G brands moved to Coty.
This is the lowest employee headcount that P&G has seen since 2012, when it began its restructuring efforts. The restructuring is part of the company’s ongoing plan to slash costs in areas of supply chain, marketing, and overhead expenses.
P&G has been witnessing a decline in revenue as competition gets stiffer in the consumer goods market. To protect its bottom line, the company has been aggressively working on trimming costs.
What’s worth noting is that, in spite of cutting its workforce, the company has continued to increase its dividend payout through these years.
This is what P&G’s employee count looks like through these six years of restructuring.
|Year||Number of Employees|
Job cuts, however, do not come cheap. Companies have to incur separation charges, primarily in the form of severance packages and other benefits. P&G incurred high restructuring costs—primarily from employee separation packages and from closing facilities—of approximately $754.0 million for the fiscal-year 2017.
In the latest fiscal year, about 2,120 employees received severance packages from the company. Most of these employees were offered buyouts and chose to accept a voluntary exit.
Since 2012, when the restructuring program started, 19,190 employees have received severance packages. The company has said that its restructuring efforts will continue through the next two years to further reduce costs, implicitly indicating that more job cuts may follow.
P&G mentions in its annual report that its financial projections for the next fiscal year “assume certain ongoing productivity improvements and cost savings, including staffing adjustments as well as employee departures.”
As of now, P&G employs about 10,000 employees in the Greater Cincinnati area. In the previous fiscal year, the company had 10,500 employees in that area.
“P&G 2017 Annual Report,” P&G Investor, last accessed August 10, 2017.
“P&G trims advertising spend, employment,” Cincinnati Business Courier, August 9, 2017.