### Procter & Gamble Announces Major Workforce Reduction and Restructuring Plan

Procter & Gamble (P&G), the global consumer goods giant known for brands like Tide detergent, has announced plans to cut 7,000 jobs over the next two years. This decision comes amid an uncertain consumer spending environment exacerbated by ongoing U.S. tariffs that have impacted numerous companies in the sector.

As part of its broader restructuring strategy, P&G will also exit certain product categories and markets. Company executives characterized these moves as an "intentional acceleration" of their existing strategy to stay competitive in a challenging market. During the Deutsche Bank Consumer Conference in Paris, CFO Andre Schulten and operations head Shailesh Jejurikar described the geopolitical environment as "unpredictable," with consumers facing "greater uncertainty."

President Trump's tariffs have disrupted global markets and heightened fears of a possible U.S. recession. P&G estimates it will face a $600 million before-tax hit in its fiscal year 2026 due to the current tariff rates, a figure that has fluctuated over time. The broader trade war has already cost companies at least $34 billion in lost sales and additional costs, according to Reuters.

The job cuts, which constitute about 6% of P&G's workforce, aim to simplify the company's organizational structure by broadening roles and reducing team sizes. The restructuring plan is also expected to divest low-growth and low-moat units, potentially freeing up resources for the company's core brands like Tide, Pampers, and Old Spice.

In recent years, P&G has made strategic exits from several markets, including Argentina and some operations in Nigeria. It has also sold the Vidal Sassoon hair care brand in China and other local brands in Latin America and Europe. Despite these changes, P&G stated that about 90% of the products it sells in the U.S. are produced domestically, although some raw materials and finished products are imported from China.

The company disclosed that it will incur charges between $1 billion to $1.6 billion before tax over the two-year restructuring period, with about a quarter of these charges expected to be non-cash. As of June 2024, P&G reported having approximately 108,000 employees. The latest job cuts will affect roughly 15% of its non-manufacturing workforce.

P&G's stock fell about 2% following the announcement, remaining relatively flat over the past year. The restructuring plan, while challenging, is aimed at positioning the company to better navigate the complex global economic landscape.