Kimberly-Clark Cutting 5,000 Jobs Amid Pressure on Prices
- 6 years ago
Kimberly-Clark Cutting 5,000 Jobs Amid Pressure on Prices
In a conference call with analysts on Tuesday, Kimberly-Clark’s chief financial officer, Maria Henry, said “cash flow benefits” from the Republican tax cut would help fund “the restructuring program over the next few years.” She said the tax savings would also be used to make capital investments
and to “allocate significant capital to shareholders.”
The consumer product industry’s lackluster financial performance has made it a target of Wall Street activists.
Thomas J. Falk, the chairman and chief executive, said in a statement that the cuts would make the company “leaner, stronger and faster.”
The pressures on Kimberly-Clark reflect the upheaval in the retail industry, where a fierce battle among behemoths like Amazon and Walmart is driving down prices, particularly for household items
that many consumers treat increasingly as commodities.
Procter & Gamble, a major competitor to Kimberly-Clark for consumer goods, spent last year engaged in a fight
with the activist investor Nelson Peltz, who had called on the company to cut costs and restructure.
Although Mr. Falk said the restructuring plan would improve the company’s results in 2018, he conceded
that “market conditions will remain challenging in the near term.”
In the conference call with analysts on Tuesday, executives said
that even in the current slow-growth environment, the company needed to find ways to increase profits.
In addition to announcing job cuts on Tuesday, Kimberly-Clark said it would raise its quarterly dividend by 3.1 percent this year.
In a conference call with analysts on Tuesday, Kimberly-Clark’s chief financial officer, Maria Henry, said “cash flow benefits” from the Republican tax cut would help fund “the restructuring program over the next few years.” She said the tax savings would also be used to make capital investments
and to “allocate significant capital to shareholders.”
The consumer product industry’s lackluster financial performance has made it a target of Wall Street activists.
Thomas J. Falk, the chairman and chief executive, said in a statement that the cuts would make the company “leaner, stronger and faster.”
The pressures on Kimberly-Clark reflect the upheaval in the retail industry, where a fierce battle among behemoths like Amazon and Walmart is driving down prices, particularly for household items
that many consumers treat increasingly as commodities.
Procter & Gamble, a major competitor to Kimberly-Clark for consumer goods, spent last year engaged in a fight
with the activist investor Nelson Peltz, who had called on the company to cut costs and restructure.
Although Mr. Falk said the restructuring plan would improve the company’s results in 2018, he conceded
that “market conditions will remain challenging in the near term.”
In the conference call with analysts on Tuesday, executives said
that even in the current slow-growth environment, the company needed to find ways to increase profits.
In addition to announcing job cuts on Tuesday, Kimberly-Clark said it would raise its quarterly dividend by 3.1 percent this year.