In a strategic move to realign its operations amid global economic headwinds, Procter & Gamble (P&G) has announced a major restructuring plan that includes cutting 7,000 jobs over the next two years and exiting certain product categories and brands in select markets. The initiative comes as the world’s largest consumer goods company braces for continued geopolitical instability and shifting consumer behavior.
The job cuts will amount to approximately 6% of P&G’s global workforce, targeting non-manufacturing roles to simplify the company’s organizational structure. Procter & Gamble , which had roughly 108,000 employees as of June 2024, described the cuts as part of a broader restructuring strategy aimed at enhancing operational efficiency in a highly competitive environment.
“This is not a new approach, rather an intentional acceleration of the current strategy … to win in the increasingly challenging environment in which we compete,” company executives said during the Deutsche Bank Consumer Conference in Paris.
By streamlining teams and broadening roles, Procter & Gamble aims to become more agile and better positioned to allocate resources toward high-growth categories and markets.
A Challenging Global Environment
P&G executives including Chief Financial Officer Andre Schulten and Chief Operating Officer Shailesh Jejurikar emphasized the unpredictable geopolitical climate and consumer uncertainty as key drivers of the restructuring.
The ongoing trade tensions most notably those stemming from former President Donald Trump’s tariffs have added significant pressure to companies reliant on international supply chains. P&G imports raw materials, packaging, and some finished goods from China. While 90% of its products are made domestically, tariffs have nonetheless imposed substantial cost burdens.
P&G estimates a $600 million before-tax impact in fiscal year 2026 due to current tariff rates, which have fluctuated frequently in recent months.
Procter & Gamble: Cost-Cutting Meets Strategic Simplification
The company expects to incur $1 billion to $1.6 billion in pre-tax charges over the two-year period of restructuring, with around 25% of that estimated to be non-cash. These costs stem from severance packages, asset impairments, and other restructuring-related expenses.
Procter & Gamble says this strategy will simplify its organizational structure, making it leaner and more responsive to change. It also plans to exit certain brands and categories in underperforming markets.
“Spring cleaning at scale, shedding low-growth, low-moat units frees up cash to turbo-charge Tide, Pampers, and Old Spice—the core brands,” said Michael Ashley Schulman, Chief Investment Officer at Running Point Capital.
Pulling All Levers to Mitigate Tariffs
To offset the rising costs from tariffs and inflation, P&G has already begun raising prices on some products. CFO Schulten confirmed that the company will “pull every lever” available to manage the impact through a combination of pricing adjustments, supply chain optimization, and workforce reductions.
This multi-pronged approach offers P&G greater flexibility during a time when economic conditions can shift rapidly. The two-year timeline for job cuts allows the company to modulate its actions depending on evolving trade policies and market conditions.
“The two-year window … gives them some flexibility in terms of timing and depth of cuts, as the tariff situation is very fluid,” noted Christian Greiner, a senior portfolio manager at F/m Investments.
P&G’s decision to exit some product categories and brands is in line with its ongoing strategy to focus only on high-growth, high-margin businesses. The company has already begun divesting and scaling back in several regions and categories:
- Exited the Argentina market entirely
- Restructured operations in Nigeria
- Sold the Vidal Sassoon brand in China
- Discontinued select local brands in Latin America and Europe
These decisions are helping P&G concentrate its resources on areas where it can maintain or grow market share, especially as global consumption patterns shift.
Despite the significance of the announcement, P&G’s stock was down only about 1% in early trading, and has remained relatively flat over the past 12 months. This muted response suggests that investors may have already priced in the challenges facing the company, or that they view the restructuring as a long-term positive.
The company’s clear focus on streamlining operations, boosting core brand performance, and responding proactively to global pressures appears to have instilled some confidence in its resilience.
P&G’s decision to cut 7,000 jobs and exit underperforming brands is not a signal of weakness but rather a strategic reset tailored to thrive in today’s unpredictable economic and geopolitical environment. As inflation, tariffs, and shifting consumer trends continue to challenge multinational corporations, P&G is taking deliberate action to future-proof its operations.
By doubling down on its best-performing brands and simplifying its organizational structure, P&G hopes to remain a dominant force in the global consumer goods marketleaner, smarter, and more agile than ever before.
