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Marketing Giant Announces Sweeping Reorganization

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CINCINNATI ( -- In a reorganization effort sparked by stiffer global competition, Colgate-Palmolive Co. today announced plans to cut 12% of its workforce, or 4,400 jobs;
Colgate plans sweeping changes across its global organization.
consolidate global media buying and other global purchasing under a single organization; and step-up efforts to improve marketing return on investment.

100 initiatives
The sweeping plan, which comes in response to growing competition by Procter & Gamble Co. and other international competitors, encompasses 100 initiatives in all, including using proprietary systems developed to run with SAP's supply-chain software to improve the efficiency of Colgate's advertising and promotion spending, the company said in a statement this morning.

Colgate also will accelerate "innovative marketing and new products," especially in "high-potential countries," which the company did not list.

Colgate said it would increase personnel and upgrade sales and marketing organizations in several of those high-potential markets outside the U.S. and consolidate its sales organizations in "mature markets," but did not offer details regarding future of its U.S. marketing organization.

Sale of detergents
Colgate did not announce the sale of its U.S. detergent brands, including Fab, Ajax and Dynamo, which executives close to the company say is imminent, but may not be concluded until early next year.

The gain from the sale is likely to exceed the $45 million in restructuring charges Colgate is taking in 2004, according to analysts, but less than the $250 million to $300 million Colgate will take in 2005. The company has a policy of using gains from divestitures to offset restructuring charges.

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