Procter & Gamble (P&G), one of the world’s largest consumer goods companies, has announced it will lay off approximately 7,000 employees, or 15 per cent of its non-manufacturing workforce, as part of a sweeping global restructuring initiative. The move comes in response to growing macroeconomic headwinds, including the impact of US trade tariffs and slowing consumer demand in key markets.
The announcement was made by Chief Financial Officer Andre Schulten during the Deutsche Bank Consumer Conference on Thursday. As of June 30, P&G reported a global workforce of around 108,000 employees, according to regulatory disclosures.
Schulten revealed that tariffs imposed under former US President Donald Trump’s administration have significantly increased import costs for the company. These costs, in turn, have pushed manufacturers like P&G to hike prices, straining margins. He noted that the company anticipates a $600 million pre-tax hit in fiscal 2026 due to these trade policies and expects a reduction of three to four cents per share in its upcoming fourth-quarter earnings.
In the US, P&G’s largest market, growth has already slowed. The company recorded just a 1 per cent rise in North American organic sales during its fiscal third quarter. Rising input costs, coupled with softer consumer demand and trade uncertainty, have weighed heavily on financial performance.
Revamped Supply Chain
However, the restructuring plan is not limited to layoffs. P&G also plans to revamp its supply chain, streamline internal operations, and evaluate its product portfolio. Schulten hinted at possible market or brand exits, with more clarity expected during the firm’s Q4 earnings call in July.
The reorganisation is projected to cost between $1 billion and $1.6 billion before taxes. Schulten emphasized that the plan is designed to position P&G for long-term growth, even though it won’t fully shield the company from near-term volatility.
P&G’s decision mirrors broader trends across Corporate America. Firms like Microsoft and Starbucks have also enacted workforce reductions amid persistent economic challenges. The developments have sparked growing concern over the health of the U.S. labor market, particularly as investors await May’s nonfarm payrolls report. Although April data beat expectations, recent figures from ADP suggest hiring may already be slowing.
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