P&G plans to cut more jobs, repurchase additional shares


Procter & Gamble Co plans to trim more non-manufacturing jobs through 2016, on top of a 10 percent reduction target it should meet this year, and said it may increase stock repurchases to $6 billion from $4 billion.

Shares of P&G, a component of the Dow Jones industrial average , gained about 17 cents to $66.70 in early trading on the New York Stock Exchange.

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The world's largest maker of household products laid out its latest plans on Thursday as it works to improve its structure and cut costs. Ahead of a bi-annual meeting with analysts being held this year at P&G's Cincinnati headquarters, the company also maintained its forecasts for sales and earnings for the current quarter and the fiscal year.

P&G remains on track to eliminate about 5,700 non-manufacturing jobs by the end of the current fiscal year that will end in June. It now plans to reduce another 2 percent to 4 percent of its non-manufacturing jobs each year during fiscal 2014, 2015 and 2016.

Competitors such as Kimberly-Clark Corp and Colgate-Palmolive Co are also trimming their ranks.

P&G also said that it expects to deliver annual improvement of 5 percent in its manufacturing operations, measured by the number of cases of products produced per person, per year.

Thursday's outlook comes weeks after a better-than-expected quarterly report drove P&G shares to their highest level in four years.

P&G has been under pressure to improve following the investment of activist investor William Ackman, who may want to see P&G Chairman and Chief Executive Bob McDonald pushed out of his job. Even before Ackman's involvement, P&G was proceeding with a $10 billion restructuring and other plans to strengthen operations.

On Wednesday, Ackman's Pershing Square Capital Management disclosed that it raised its combined stake in P&G by 27.4 percent to 27.9 million shares as of September 30, while Warren Buffett's Berkshire Hathaway reduced its holdings 11.4 percent to 52.79 million shares.

P&G stood by the forecasts that it gave in late October. At that time, P&G said it still expected to post core earnings per share of $3.80 to $4 this fiscal year. For the current second quarter, P&G forecast core earnings of $1.07 to $1.13 per share, with organic sales up 1 percent to 3 percent.

(Reporting by Jessica Wohl in Cincinnati; editing by John Wallace and Maureen Bavdek)