announced today that it will cut 1,600 jobs, or 3% of its workforce, in an effort to pare down costs and compete with rivals and private label brands.
As unfortunate as the layoffs are to their workers, there are really no surprises here; Kimberly-Clark has been on a four-year cost-elimination binge. The plan includes cutting 6,000 jobs and closing 20 manufacturing plants. Earlier this year the company froze pension plan benefits for U.S. non-union employees.
The job cuts announced on Thursday will affect all regions and businesses, but do not include closing any factories.
Kimberly-Clark expects to record charges of $140 million to $150 million, or about 25 cents a share due to the layoffs. About $110 million of those charges are slated for the second quarter.
But the company also expects to see savings of about $60 million, or 10 cents per share, during the second half of the year.
In April, Kimberly-Clark management said it expected to slash jobs in the second and third quarters, as its household products, such as Kleenex and Huggies diapers, face competition from lower-cost brands sold at
Procter & Gamble
has also stepped up its push to pick up market share from consumers tightening their belts, by pushing lower-priced versions of key items.
Kimberly-Clark is also feeling pressure from restaurants and other businesses it serves, which have been hit hard by the recession.
In the first quarter,
, the sixth consecutive quarter it saw a decline in profit. During the quarter, it earned $407 million, or 98 cents a share, compared with $441 million or $1.04 in the same period last year.
Shares of the company slipped .5% to $51.58 in morning trading.
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