Procter & Gamble (P&G) plans to reduce its workforce by 7,000 jobs over the next two years.

This reduction represents about 6% of its total staff and is part of a broader restructuring initiative to address economic challenges.

The company will exit selected product categories and brands in certain markets to navigate economic and geopolitical headwinds.

Executives cited global instability and rising consumer uncertainty, adding that tariffs could cost the company US$600 million before tax by 2026.

The restructuring includes streamlining operations, reducing team sizes, and incurring up to US$1.6 billion in charges, with a quarter being non-cash.

P&G has previously exited markets and divested brands like Argentina and Nigeria, while most of its US sales still come from domestic production.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: Reuters

🧠 Food for thought

1️⃣ P&G’s pattern of major restructuring follows predictable business cycles

The current job cuts represent the fourth major restructuring at P&G in 25 years, revealing a cyclical pattern in how consumer goods giants respond to market pressures.

In 1999, P&G cut 15,000 jobs globally as part of “Organization 2005,” affecting about 13% of its workforce at that time1.

The company underwent another significant transformation in 2013 when it brought back former CEO A.G. Lafley to address declining sales and market share issues amid changing consumer preferences2.

This was followed by a 2018 reorganization that created six business units structured around product categories rather than geographical regions to improve market responsiveness3.

Each restructuring coincided with specific economic challenges, from market saturation in the late 1990s to the current pressures from tariffs and uncertain consumer spending, demonstrating how even market leaders must periodically reinvent themselves to maintain competitiveness.

The repetitive nature of these restructuring efforts suggests that large consumer goods companies face fundamental industry challenges that require periodic organizational renewal rather than one-time solutions.

2️⃣ Manufacturing resilience amid corporate streamlining reveals strategic priorities

P&G’s decision to focus cuts on non-manufacturing roles, about 15% of its non-manufacturing workforce, while preserving production capacity highlights a strategic bifurcation in how consumer goods companies value different operations.

The company has invested $10 billion in U.S. manufacturing over the past decade, demonstrating a long-term commitment to domestic production capabilities despite corporate restructuring4.

P&G produces approximately 90% of what it sells domestically, insulating much of its supply chain from direct international trade disruptions even as it faces rising costs for imported raw materials and packaging.

This manufacturing-protective approach contrasts with broader industry trends where companies often cut across all functions equally, revealing P&G’s strategic emphasis on maintaining production efficiency while streamlining corporate overhead.

The pattern suggests P&G views its production infrastructure as a competitive advantage and core capability, while seeing opportunities to simplify organizational structure by “making roles broader” and “teams smaller” in corporate and administrative functions.

3️⃣ Trade policy directly reshapes corporate structures beyond simple cost impacts

P&G’s restructuring directly responds to a $600 million projected tariff impact in fiscal year 2026, demonstrating how trade policy doesn’t just affect pricing strategies but fundamentally reshapes corporate structures5.

Unlike some competitors who quickly relocated supply chains, P&G has adopted a more measured “wait-and-see” approach, relying on pricing adjustments and productivity improvements while maintaining its primarily U.S.-based manufacturing footprint4.

This cautious strategy reflects the complexity of responding to potentially volatile policy changes, illustrated by CFO Andre Schulten’s characterization of the geopolitical environment as “unpredictable” and consumers facing “greater uncertainty.”

The broader impact of trade policies extends beyond direct costs, with Reuters analysis showing the trade war has cost companies at least $34 billion in lost sales and higher expenses, forcing structural changes across multiple industries.

P&G’s experience highlights how tariffs and trade tensions can accelerate existing corporate trends toward simplification and focus on core brands, as evidenced by executive comments about “spring cleaning at scale” to concentrate resources on established brands like Tide, Pampers, and Old Spice.

……