American consumer goods giant Procter & Gamble Co (P&G) has announced plans to cut about 7,000 jobs over the next two years as part of a restructuring effort, amid lagging consumer demand and high costs linked to tariffs imposed by former US President Donald Trump.
Company executives made the cost-cutting announcement—impacting approximately 6% of P&G’s total workforce—at the Deutsche Bank Consumer Conference in Paris. The job cuts will affect 15% of the company’s non-manufacturing staff. As of June 30, 2024, P&G employed around 108,000 people. A copy of the presentation was shared on the company’s website.
In April, the maker of Tide detergent announced price hikes on certain products, stating it was prepared to use every tool at its disposal to offset the impact of tariffs. At the time, Chief Financial Officer Andre Schulten cited pricing and cost reductions as the company’s primary levers.
According to Reuters, Schulten and Chief Operating Officer Shailesh Jejurikar said on Thursday that the geopolitical landscape remains "unpredictable" and consumers are facing "greater uncertainty." The maker of Old Spice expects additional tariff-related costs of $1 billion to $1.5 billion annually.
The report also noted that P&G plans to divest certain brands and adjust its supply chain to help reduce costs.
Job Cuts Follow Flat Sales
Procter & Gamble, whose fiscal year runs from July 1 to June 30, reported flat net sales of $20.5 billion in the fourth quarter of FY24 (April–June), while organic sales rose 2%. Net earnings dropped 7% year-on-year to $3.1 billion.
For the full fiscal year, the company posted a 2% increase in net sales to $84 billion and a 4% rise in organic sales, largely driven by pricing gains. Looking ahead to FY2025, P&G expects 2–4% sales growth and 5–7% growth in core EPS, with plans to return up to $17 billion to shareholders.
P&G imports raw materials, packaging, and some finished goods from China, though about 90% of what it sells in the US is produced domestically, a company spokesperson told Reuters in April.
While China accounts for just over 10% of its import exposure, Schulten said the new 145% tariff significantly amplifies the impact—estimating an annual hit of $1–1.5 billion to its cost of goods, which totalled $40.85 billion in 2024.
Amid weakening consumer sentiment and ongoing supply chain challenges, several companies have revised or withdrawn their annual forecasts. Often seen as a bellwether for consumer demand, P&G noted a slowdown in US shopper activity in February and March.
With North America accounting for 52% of its 2024 net sales, P&G now expects flat sales for FY2025, down from its earlier projection of 2–4% growth. Although the company had signalled a move away from price increases, it raised prices by 1% in the third quarter, while sales volumes declined by 1%.
