P&G to wipe out 15,000 jobs

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Procter & Gamble Co., Cincinnati, said today it will cut 15,000 jobs, mainly in manufacturing and administrative areas, over the next five years under its Organization 2005 restructuring, generating a charge of $1.9 billion. Cuts will come mainly in Europe, where 6,250 jobs will be lost; 4,300 will be cut in North America. Expectations have been that few of the layoffs would come from the marketing departments. Some of the charge also is tied to what Treasurer Clayton Dailey called "excess capacity in our Olean facility," reflecting lower-than-expected sales of the fat substitute. However, P&G is considering an application with the Food & Drug Administration to expand use of Olean in more high-nutrition types of foods, President-CEO Durk Jager said in a conference with analysts in New York. P&G also expects use of Olean to increase as regional snack manufacturers begin to launch products using the substance. Organization 2005 should allow P&G to reach sales growth of 6% to 8% annually in the years ahead, Mr. Jager said.

Copyright June 1999, Crain Communications Inc.

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