P&G set to cut more jobs, repurchase additional shares

Thu Nov 15, 2012 2:52pm EST
 

By Jessica Wohl

CINCINNATI (Reuters) - Procter & Gamble plans to trim more non-manufacturing jobs through 2016, on top of cutting 10 percent of that workforce by the end of June, as the world's largest household-products maker tries to reinvigorate what has become a sluggish organization.

P&G also said it may increase stock repurchases to $6 billion from $4 billion, but said such additional buybacks should not have a big impact on earnings per share. The company maintained the forecasts for sales and earnings for the current quarter and the fiscal year it had given in late October.

P&G remains on track to eliminate about 5,700 non-manufacturing jobs by the end of this fiscal year, which will end in June. It now plans to reduce another 2 percent to 4 percent of its non-manufacturing jobs each year during fiscal 2014, 2015 and 2016.

"These are all continued steps in the right direction, but we wish they had taken bolder ones like even more aggressive cost-cutting," said Sanford Bernstein analyst Ali Dibadj, who attended P&G's bi-annual analyst meeting at the company's Cincinnati headquarters on Thursday.

Shares of P&G, a component of the Dow Jones industrial average .DJI, were down 0.2 percent at $66.38 in afternoon trading on the New York Stock Exchange.

CUTTING JOBS IN DEVELOPED MARKETS

The maker of Tide detergent and Pampers diapers has been working for months to improve its structure and cut costs. It has admitted that recent innovations were not as strong as successes from years past such as Swiffer and Crest Whitestrips.

"The reality is that the pace of our disruptive innovation has slowed over the past decade," said Jorge Mesquita, P&G's group president of new business creation and innovation and global pet care.   Continued...

 
Tide detergent, a Procter & Gamble product, is displayed on a shelf in a store in Alexandria, May 28, 2009. REUTERS/Molly Riley