Procter & Gamble Co. to cut 13,000 jobs

Published July 16, 1993|Updated Oct. 9, 2005

Consumer products giant Procter & Gamble Co. said Thursday it will slash 13,000 jobs and close 30 factories to slim down and battle mounting competition from cut-price rivals.

P&G emphasized that the cost-cutting plan will allow it to go on the offensive and set lower prices while earnings and revenues are still strong.

All told, the company is cutting 12 percent of its work force and closing about one in five factories to save $500-million a year. It is the most extensive restructuring since P&G was founded in 1837.

While employees got the bad news, the company disclosed that its profit margins were the highest in a decade and awarded stockholders a higher dividend.

"We could have ignored this for now and just reported good results and raised the dividend and said we're very pleased with everything," said chairman and chief executive officer Edwin Artzt. "But I guarantee you that two years from now, this company would be racing to get caught up with the things that we're doing now."

The company makes hundreds of products such as Tide laundry detergent, Crest toothpaste, Charmin bath tissue and Jif peanut butter, but it has faced inroads from store brands and sale items that compete solely on price.

P&G is facing the same problem as other consumer products companies that have had to slash prices because shoppers are no longer willing to pay a premium for a name brand.

Despite the P&G's plan, its stock closed down 87{ cents at $51.67{ on the New York Stock Exchange.