--Procter & Gamble plans to cut nonmanufacturing jobs further
--Boosts fiscal 2013 share buyback program by 50%
--Announces plans ahead of biennial meeting with analysts
(Adds detail on latest buyout program in 6th paragraph, and updates shares.)
By Paul Ziobro
Procter & Gamble Co. (PG) announced plans to possibly cut more than twice as many nonmanufacturing jobs than it had already planned, a further sign that it is heeding analyst and investor criticism over its bloated cost structure.
P&G also said it is boosting its share buyback program this fiscal year by 50% to $6 billion, a figure that may move higher if the company can generate more cash than anticipated.
The world's largest consumer-product company Thursday disclosed plans to cut its nonmanufacturing workforce by an additional 2% to 4% annually through fiscal year 2014 to 2016. That comes on top of plans to reduce its nonmanufacturing jobs by 10%, or 5,700, by the end of its current fiscal year ending June 30.
The top end of the job-cut projections would further reduce P&G's nonmanufacturing workforce by an additional 5,900.
"We're working to make productivity an ingrained part of our culture, similar to innovation," P&G Chief Executive Bob McDonald said during the company's biennial meeting with analysts. "Always present, always important."
P&G's latest buyout program ended Oct. 31. For those lower in management, it included about six months of salary plus benefits and options, according to former employees who recently took the buyout. P&G ranks its employees based on performance with the No. 1s accounting for the top 10% of the company. Most employees allowed to take the buyout weren't in the 1 category except in special circumstances, former employees and executives say.
P&G, which also backed its fiscal 2013 outlook Thursday, has taken several steps over the past year to lower costs and refocus its business on a narrower set of business lines, countries and new products. In February, the company unveiled a $10 billion restructuring program that looks to save money on everything from raw materials to marketing costs, and recently hinted that the target may go higher.
The company also recently created a new position focusing on cutting costs and reorganizing the organization, which was recently filled by Jorge Uribe, a longtime P&G executive who recently headed the company's Latin American region.
The changes have come as pressure has ratcheted up on P&G, from inside and outside the company, over the company's lackluster performance in recent years, where it has been outperformed by global competitors like Colgate-Palmolive Co. (CL). The most notable criticism has come from William Ackman, whose Pershing Square Capital Management has amassed a $1.8 billion stake in P&G, and who has pushed for deeper cost cuts, as well as the replacement of Mr. McDonald.
P&G shares have responded from Mr. Ackman's overtures and strategic changes. Following last month's better-than-expected first-quarter results, P&G shares hit a new four-year high of $70.83, although they have retreated a bit since then. In recent trading, they were down 0.9% to $66.92.
P&G still faces challenges, including the loss of market share in most of its businesses. The company's share losses have moderated as the company has cut prices on items like Gillette razors and powdered laundry detergent in the U.S.
--Emily Glazer and Melodie Warner contributed to this article.
Write to Paul Ziobro at firstname.lastname@example.org
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