Kimberly-Clark to Cut as Many as 5,500 Jobs


Huggies diapers, one of Kimberly-Clark’s best-known brands, at a plant in Paris, Texas. The company cited lower United States birthrates as among the reasons for its cuts. Credit Laura Buckman/Bloomberg

Kimberly-Clark, the maker of Huggies and Kleenex, said on Tuesday it would cut between 5,000 and 5,500 jobs worldwide in an effort to reduce costs in the face of sluggish sales.

The reduction of as much as 13 percent of its staff comes as part of a yearslong effort to cut expenses and is expected to contribute to savings of up to $550 million by the end of 2021. The company is also aiming to save more than $1.5 billion by 2021 through its so-called Force program, which includes efforts like improving productivity at its manufacturing facilities and more efficient distribution.

The company, which also announced earnings on Tuesday, said the job cuts were expected to affect all parts of the business around the world.

Based in Dallas, Kimberly-Clark said it would close or sell about 10 manufacturing facilities and sell some low-margin businesses, focused on making tissues, that generate only 1 percent of net sales.

Explaining the changes, Kimberly-Clark cited lower birthrates in the United States, which would hamper sales of diapers and other care products, as well as competitive pressure that is driving prices down for personal care products.

“This is the biggest restructuring we have undertaken since the introduction of our Global Business Plan in 2003, and it will make our company leaner, stronger and faster,” Thomas J. Falk, the chairman and chief executive, said in a statement. “The changes we are making will improve our underlying profitability, provide more flexibility to invest in growth opportunities and help us compete even more effectively.”

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Although Mr. Falk said the plan would improve the company’s results in 2018, he did concede that “market conditions will remain challenging in the near-term.” The company predicted sales growth of between 1 and 2 percent for this year.

The environment that is pressuring makers of consumer goods affected Kimberly-Clark’s competitor Procter & Gamble, which spent last year engaged in a fight with the activist investor Nelson Peltz. Mr. Peltz had called on the company to cut costs as it fought to retain customers who were abandoning its brands for cheaper alternatives. After an expensive battle, Mr. Peltz gained a board seat in December.

Kimberly-Clark’s net income was $617 million in the fourth quarter of 2017, an increase of 22 percent compared with the same period the year before. Its shares dropped a little, but were broadly flat by late morning Eastern Standard Time.

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