The Procter & Gamble Co. will cut about 9,600 jobs worldwide 9 percent of its work force as it tries to restore long-term growth, the company said Thursday.
About 40 percent of the job cuts will be in the United States.
Combined with reductions announced earlier in P&G;'s reorganization,
the cuts total 17,400. The company has a work force of 110,000.
The announcement followed reports a day earlier that Procter was
considering eliminating up to 20 percent of its work force in
response to the economic downturn.
The latest cuts by the maker of Crest toothpaste, Tide detergent
and Pampers diapers follow similar large reductions at large
corporations as DaimlerChrysler AG, Compaq Computer Corp., Lucent
Technologies and Motorola Corp.
Management of the 164-year-old Procter & Gamble said the job
cuts are needed to make P&G; leaner and more competitive in today's
Employees were told Thursday morning of the plan. Management
said that it will finish up 7,800 cuts announced in a 1999
restructuring begun by former chief executive Durk Jager to cut out
layers of bureaucracy.
"This program is right for the long-term health of our business
and is the next step in our plan to restore long-term growth,"
said A.G. Lafley, the company's president and chief executive.
The job cuts will begin immediately in the United States with a
voluntary departure plan open to all non-plant employees who would
have enough service time to be eligible. Outside the United States,
management is still organizing the plan country by country.
P&G; officials said some employees will be laid off but
management hopes to limit that number.
The company expects the job cutting program to cost $1.4 billion
after taxes, with most of that expense coming during the company
fiscal year that begins July 1. Savings from the reduction should
total at least $600 million a year after taxes by fiscal 2003-04,