CINCINNATI - Procter & Gamble Co. announced a new $10 billion cost-cutting initiative and a green new version of Tide detergent in David Taylor’s first public appearance as CEO of the Cincinnati-based consumer products company.
Taylor also promised Wall Street analysts that he will shake up P&G’s corporate culture to improve profitability and growth.
“Is P&G willing to change? Let me state unequivocally: P&G is ready to adapt, evolve and change to do what is needed to win,” Taylor told a group of Wall Street analysts in Boca Raton, Florida.
“We aspire to be the best,” Taylor added. “Doing so requires we raise the bar. We know we haven’t been delivering lately, especially on the top line (revenue) and we need to take our standards up.”
Chief Financial Officer Jon Moeller told an annual conference of the Consumer Analysts Group of New York that the company will achieve $10 billion in new “productivity improvements” in the next five years. That’s the same amount of savings P&G announced to the same group in 2012. That initiative ultimately led to $23 billion in cost savings and the elimination of 12,600 non-manufacturing jobs.
P&G isn’t saying how many jobs will be trimmed with the new cost-cutting program. Spokesman Damon Jones said the “vast majority” of cost savings will be achieved without job cuts – improving efficiencies in production and the way it buys advertising. But P&G isn’t ruling out additional employment cuts.
“Business leaders will do what’s needed for their individual units,” Jones said.
Taylor said P&G is changing its approach to talent development, with a new concept he called “Staff to Win.” The company will recruit more mid-career employees from outside company and do less shifting of executives from brand to brand. That’s been a hallmark of P&G talent development over the years, making sure seasoned executives have worked in many segments of the company before rising to the top.
But Taylor said P&G’s new objective is to “keep people in the right place to develop their skills for the benefit of the business.”
“We are committed to getting, keeping and growing the right people in the right place to drive better business results,” he said.
Taylor said P&G’s ability to restore revenue and profits will depend largely on its ability to bring new users to its brands with new innovations and sampling programs that put P&G products into consumers hands.
On the innovation front, Taylor announced a new product Thursday. Tide PurClean liquid detergent that has “65 percent bio-based ingredients” and its produced with “100 percent renewable wind-power energy” in a facility that sends “zero waste to landfills.”
The new product will launch in May and target a growing demand for natural products that now represent only a three percent share of the U.S. laundry sales, Taylor said.
“Unlocking growth in naturals is about solving the tension between green and clean,” he said. “People want performance and sustainability.”