Mirror Review
June 6th, 2025
Summary:
- Procter & Gamble (P&G) announced plans to cut up to 7,000 jobs over the next two years.
- These Procter & Gamble layoffs represent approximately 6% of P&G’s global workforce and about 15% of its non-manufacturing positions.
- The layoffs are part of a broader two-year restructuring program.
- P&G also plans to exit some product categories in certain markets and make supply chain adjustments.
- The company expects to incur $1 billion to $1.6 billion in pre-tax charges related to the restructuring.
The Decision of Procter & Gamble Layoffs
The company, known for everyday household names like Pampers, Tide, and Gillette, had around 108,000 employees as of June 2024. But now, it’s reshaping its workforce and operations to stay competitive.
The decision by Procter & Gamble to cut 7,000 jobs was announced by P&G’s Chief Financial Officer, Andre Schulten, during the Deutsche Bank Consumer Conference in Paris.
Schulten stated that this major restructuring is designed to position the company for sustained growth.
“This restructuring program is an important step toward ensuring our ability to deliver our long-term algorithm over the coming two to three years,” he stated.
However, he also acknowledged, “It does not, however, remove the near-term challenges that we currently face”.
The company has assured that “employee separations will be managed with support and respect, and in line with our principles and values and local laws”. Specific details regarding the impact on different regions or sites are yet to be disclosed.
The focus of the Procter & Gamble layoffs will be on non-manufacturing or “white-collar” positions, with its 52,000 factory employees, including those at 24 U.S. manufacturing plants, not being targeted.
Why is P&G Restructuring Now?
1. Rising Costs and Tariffs:
The company has been struggling with higher operational costs, partly due to U.S. tariffs.
These tariffs have particularly affected raw materials, packaging, and some finished goods imported from China.
P&G estimated a potential pre-tax impact of about $600 million in its fiscal year 2026 from current tariff rates.
2. Shifting Consumer Behavior:
P&G, like many other companies, is observing American consumers becoming more cautious with their spending amid inflation concerns.
U.S. consumer sentiment has seen a decline, reaching its second-lowest level in nearly 75 years in May.
CFO Andre Schulten noted that category growth rates in the U.S. have slowed from around 4% to about 2%, and consumer consumption slowed to about 1% in February and March from about 3% over the previous year.
He remarked, “The consumer has been hit with a lot, and that’s a lot to process. So what we’re seeing, I think, is a logical response from the consumer, to pause”.
3. Slowing U.S. Growth:
The company is facing slower growth in the U.S., its largest market, which accounts for 48% of its total revenues. For instance, North American organic sales rose by just 1% in its fiscal third quarter.
4. Strategic Acceleration:
P&G executives described the restructuring not as a new direction but as “an intentional acceleration of the current strategy… to win in the increasingly challenging environment in which we compete.”
The aim is to make “roles broader, teams smaller, work more fulfilling and more efficient, including leveraging digitalization and automation”.
What Else Is Changing?
The restructuring isn’t limited to workforce reduction. P&G is also re-evaluating its extensive portfolio of brands and its global supply chain. This could involve:
- Exiting some product categories, brands, or specific products in certain markets.
- Possible brand divestitures.
- Making changes to its supply chain to drive efficiencies, foster faster innovation, and reduce costs.
More specific details about these portfolio and market adjustments are expected to be shared by CFO Andre Schulten during the company’s fiscal fourth-quarter earnings call in July.
Financial Impact of the Procter & Gamble Job Cuts
P&G anticipates recording pre-tax charges ranging from $1 billion to $1.6 billion over the two-year restructuring period.
Approximately a quarter of these charges are expected to be non-cash.
In the near term, the company projected a 3 to 4 cent per share drag on its fiscal fourth-quarter earnings due to tariffs at current rates.
A Tough Market Influencing Procter & Gamble Layoffs
The decision for these Procter & Gamble layoffs comes at a time of considerable economic uncertainty. P&G executives highlighted that “consumers face greater uncertainty. Competition is fierce. The geopolitical environment is unpredictable.”
President Donald Trump’s tariff policies have been a recurring theme, with some commentators on social media directly linking the job cuts to the trade war.
In fact, the Congressional Budget Office previously warned that such tariffs could raise inflation and reduce economic growth—two issues P&G is now clearly struggling with.
In response to these pressures, P&G had indicated in April that it would explore sourcing alternatives, seek productivity improvements, and therefore raise prices on some products to overcome the impact of tariffs.
Looking Ahead
The Procter & Gamble layoffs and broader restructuring mark a major adjustment for the nearly 200-year-old company as it adapts to evolving market trends, cost pressures, and changing consumer habits.
While aiming for long-term stability and growth, the immediate future involves navigating considerable challenges.
The company’s leadership believes that “disciplined execution of our integrated growth strategy and even more disciplined resource allocation” will help P&G seize “growth opportunities” while addressing “increasing near-term challenges.”
What comes next? P&G’s broad portfolio of around 300 brands may evolve. Expect updates in the coming months as the company reshapes its products, teams, and approach to meet the demands of a rapidly changing market.
