Kleenex Maker Slashes Up To 13% Of Jobs As It Shutters Factories
As companies move to boost jobs and pay in the wake of the US tax overhaul, Kimberly-Clark is going in the opposite direction.
The producer of Kleenex tissues and Huggies diapers is cutting 5,000 to 5,500 workers - or 12 to 13% of its headcount - as part of a drive to reduce costs and boost margins amid uneven revenue growth and higher material costs.
Kimberly-Clark will also close or sell about 10 factories while expanding production at other sites, according to a statement.
The cutbacks threaten American factory jobs at a time when the Trump administration is trying to reinvigorate the manufacturing economy.
The company didn’t lay out where the jobs would be eliminated, other than saying they would hit every major region where it does business.
Chief Executive Officer Tom Falk said the changes will make the company “leaner, stronger and faster.” He pledged better results in 2018, even as market conditions will remain ”challenging in the the near-term.”
Kimberly-Clark sees the job cuts and restructuring creating annual cost savings of $500 million to $550 million by the end of 2021.
The company reported fourth-quarter profit excluding some items of $1.57 a share, exceeding analysts’ average estimate of $1.55.
The shares fell as much as 1.5% to $115.18 in New York Tuesday. They had dropped 3.1% this year through Monday’s close.
In the wake of the US government’s move to slash corporate taxes, a series of companies have boosted pay and announced plans to expand production in the US.