An iconic US company is set to lay off 7,000 employees as part of a significant restructuring effort that includes withdrawing from certain markets and dropping select brands.
Procter & Gamble, the household goods giant, will slash part of its global workforce as it struggles with increasing costs brought on by tariffs and declining consumer sentiment in today’s America.
This reduction represents approximately 6% of the company’s employees of 108,000 employees and a staggering 15% of its non-manufacturing staff.
The cuts come as American companies continue to struggle under the weight of inflation and economic uncertainty.
The Cincinnati-based consumer goods giant cited tariff-related costs and customer economic concerns as the primary drivers behind the restructuring.
American consumers are increasingly feeling the pinch, with the University of Michigan’s consumer sentiment index showing a significant decline.
This downturn in consumer confidence is hitting companies like P&G where it hurts most—their bottom line.
P&G’s Chief Financial Officer Andre Schulten did not mince words about the company’s difficult situation.
The restructuring program includes job cuts, withdrawal from underperforming markets, and discontinuation of certain brands.
The company plans to provide more details during its fiscal fourth-quarter earnings call in July, but the writing is already on the wall for thousands of employees.
“This restructuring program is an important step toward ensuring our ability to deliver our long-term algorithm over the coming two to three years. It does not, however, remove the near-term challenges that we currently face,” Schulten said.
The impact of tariffs on P&G’s operations cannot be understated. The company is particularly affected by U.S. tariffs on raw and packaging materials from China.
These increased costs are forcing the company to consider raising prices on everyday household items that American families rely on.
The CBO has predicted that tariffs will reduce deficits, shrink the economy, and increase inflation.
The financial impact on P&G is precise and devastating. Due to tariffs alone, the company expects a 3 to 4 cent per share hit on its fiscal fourth-quarter earnings.
They project a $600 million pre-tax headwind from tariffs by fiscal 2026. These costs are ultimately being passed on to American consumers in the form of higher prices and lost jobs.
P&G is not alone in its struggles. The Consumer Brands Association has highlighted that tariffs impact critical imported ingredients for many consumer goods companies.
Other major U.S. corporations, such as Microsoft and Starbucks, have also announced significant job cuts in recent months as the economy continues to underperform and disappoint hardworking Americans.
Investors have noticed P&G’s challenges. The company’s stock fell more than 1% following the announcement and has declined 2% year-to-date, while the S&P 500 has gained over 1%.
This performance gap illustrates how policies that hurt American businesses ultimately hurt American investors, retirees, and workers who depend on these companies for their livelihoods and financial security.
As the giant restructures and thousands of workers face uncertain futures, the company anticipates incurring noncore costs of $1 billion to $1.6 billion before taxes due to the reorganization.
This massive expense represents resources that could have been used for innovation, expansion, and the creation of more American jobs.
