Procter & Gamble Co. (PG) trimmed another 5,000 from the payroll in 2016

Headcount down 24,000 since 2012
Posted at 3:16 PM, Aug 02, 2016
and last updated 2016-08-02 17:04:44-04

CINCINNATI — Procter & Gamble Co. ended its 2016 fiscal year with 105,000 employees, down 5,000 from last year.

Company officials have yet to provide a year-end head count for local employment, which has already declined more than 15 percent to roughly 10,000 since 2012. That’s when P&G announced a five-year restructuring plan that was intended to save $6 billion but actually saved $7.2 billion.

P&G has subsequently announced the sale of 105 under-performing brands, reduced ad agency spending by $600 million and embarked on a complete overhaul of its global supply chain, part of another five-year effort that’s intended to save another $10 billion.

“Supply chain transformation is in its early stages, first in North America, next in Europe, then in Latin America and India, the Middle East and Africa,” Chief Financial Officer Jon Moeller told analysts Tuesday. “We're in investment mode now with savings to ramp up in two, three and four years.”

With so many moving parts, keeping track of P&G’s head count can be cumbersome. But it does provide a global employment number in each year’s annual report. In 2011, that number was 129,000 employees. This year’s annual report isn’t out yet, but P&G spokesman Damon Jones confirmed this year's employment number will be 105,000.

Jones also confirmed the company’s supply chain redesign will eliminate about 90 jobs in New Jersey. P&G will close a fragrance plant in Avenel, moving its production to Lima, Ohio by the end of 2018.

“This decision reflects the company’s desire to synchronize its operations end-to-end in large, multi-category facilities in strategic locations to better serve retail customers and consumers,” Jones said. “We have communicated this move two years in advance to allow the proper time for adjustments for impacted P&G employees and their families.”

Even as it cuts, P&G is still hiring. That’s because it’s building new plants and expanding others while it closes plants like Avenel, which supplies fragrance and chemicals to P&G’s home care, beauty and laundry brands.

The company also is beefing up its sales force by recruiting experienced candidates at five levels of management from outside the company. That’s a break from its traditional preference of promoting from within.

“Over the last two years, we've added 115 people to the U.S. retail sales force through external hiring, and more than half of them have prior sales experience,” Taylor told analysts Tuesday. “We're committed to getting, keeping and growing the right people in the right place to drive better business results.”

P&G has reduced its manufacturing employment by “about 22 percent all in, but that includes the addition of new sites and new capacity where we’ve added people,” Moeller told reporters in a Tuesday morning call. “On a same-site basis, we’re down about 27 percent.”

Non-manufacturing employment is down 25 percent in the same period. Both numbers exclude the impact of divestitures.

That’s why the 105,000-employee head count that will be included in this year’s annual report is likely to decline further next year. P&G has yet to close on the sale of 41 beauty brands to Coty Inc. About 10,000 P&G employees are expected to join Coty’s payroll when the deal closes in October.