Procter & Gamble (P&G), the Cincinnati-based consumer goods giant known for household names like Tide, Pampers, and Swiffer, announced plans on June 5, 2025, to cut up to 7,000 jobs over the next two years. This move represents roughly 15% of its non-manufacturing workforce and is part of a broader restructuring effort aimed at adapting to a challenging economic environment marked by slowing consumer spending and the impact of U.S. tariffs.
The announcement came during a presentation at the Deutsche Bank Global Consumer Conference in Paris, where P&G's Chief Financial Officer, Andre Schulten, detailed the company's strategy to streamline operations and refocus on its core brands. The layoffs will primarily affect white-collar roles, sparing the company’s 52,000 factory workers spread across 24 manufacturing plants in the U.S. and 78 plants in 33 other countries.
“This restructuring program is an important step toward ensuring our ability to deliver our long-term algorithm over the coming two to three years,” Schulten said. However, he cautioned that it “does not, however, remove the near-term challenges that we currently face.” The company anticipates incurring non-core costs between $1 billion and $1.6 billion before taxes as part of this reorganization, with about a quarter of those costs expected to be non-cash charges.
At the heart of P&G’s restructuring is a response to the headwinds facing the U.S. consumer market, which accounts for nearly half of the company’s revenue. North American organic sales rose just 1% in the fiscal third quarter, a sharp slowdown from previous years. Schulten noted that category growth rates in the U.S. have decelerated from around 4% in 2024 to approximately 2% in 2025, while consumer consumption slowed to about 1% in early 2025. “The consumer has been hit with a lot, and that’s a lot to process. So what we’re seeing, I think, is a logical response from the consumer, to pause,” he explained.
These economic pressures have been compounded by President Donald Trump’s tariffs, which have roiled global markets and added costs for many companies. P&G estimates a $600 million before-tax hit in fiscal year 2026 due to tariffs, with a 3 to 4 cent per share drag expected on fourth-quarter earnings. The company has responded by planning price increases starting July 2025 and committing to “pull every lever” to mitigate tariff impacts through cost-cutting and operational efficiencies.
In addition to workforce reductions, P&G is reevaluating its brand portfolio and supply chain. The company hinted at potential exits from some lower-performing brands and markets, continuing a pattern of strategic divestitures seen in recent years, such as pulling out of Argentina and restructuring operations in Nigeria. It has also divested brands like Vidal Sassoon in China and other localized brands in Latin America and Europe. Michael Ashley Schulman, chief investment officer at Running Point Capital, described the restructuring as “spring cleaning at scale,” intended to free up resources to “turbo-charge” core brands like Tide, Pampers, and Old Spice.
P&G employs about 108,000 people worldwide, with over 30,000 based in the U.S. The announced job cuts will affect approximately 6.5% of the total workforce but will disproportionately impact non-manufacturing staff, with a 15% reduction in white-collar roles. The company emphasized that employee separations will be handled with “support and respect,” adhering to its principles, values, and local laws. Specific regional or site impacts have not yet been disclosed.
The restructuring also aims to simplify P&G’s organizational structure by broadening roles and making teams smaller, allowing the company to be more agile in a volatile geopolitical environment. CFO Schulten and operations head Shailesh Jejurikar described this environment as “unpredictable,” with consumers facing “greater uncertainty.”
Shares of P&G fell more than 1% in early trading on the day of the announcement, reflecting investor concerns about the near-term challenges. The stock has dropped 2% so far in 2025, underperforming the S&P 500’s modest gains of over 1%. Despite this, P&G remains a powerhouse with a market capitalization of approximately $407 billion.
While the layoffs and restructuring follow a trend among major U.S. companies—including Microsoft, Starbucks, IBM, and Walmart—experts caution that this is more an adjustment than a crisis. P&G has a long history of adapting its portfolio to meet evolving consumer demands since its founding in 1837. With a portfolio of around 300 brands, including household staples like Dawn, Downy, Crest, and Head & Shoulders, the company’s strategy reflects an ongoing effort to focus on growth areas and shed underperforming units.
The broader economic context cannot be ignored. The U.S. consumer has “hit pause” amid inflationary pressures, geopolitical tensions, and tariff-driven cost increases. According to Reuters, the ongoing trade war has cost companies at least $34 billion in lost sales and higher costs. Against this backdrop, P&G’s restructuring is a proactive measure to safeguard its long-term growth trajectory.
Industry analysts view P&G’s approach as measured, leveraging a two-year window to implement changes with flexibility. Christian Greiner, senior portfolio manager at F/m Investments, noted that the fluid tariff situation necessitates a careful balance between timing and depth of cuts.
For Cincinnati, where P&G is one of the largest employers, the announcement carries significant local implications. The company’s commitment to handling the layoffs with respect and support is a crucial reassurance for affected employees and the community. Still, the scale of the cuts underscores the challenges facing even the most established firms in today’s uncertain economic climate.
As P&G prepares to provide more details on specific brand and market exits during its fiscal fourth-quarter earnings call in July, investors and industry watchers will be closely monitoring how the consumer goods titan navigates these turbulent waters. For now, the company’s message is clear: adapt, streamline, and focus on core strengths to weather a period of economic uncertainty and emerge stronger.
