P&G job cut may involve thousands Baltimore-area effect unknown

June 25, 1993|By New York Times News Service Staff Writer Ross Hetrick contributed to this article.

Procter & Gamble, the nation's largest maker of household goods, is expected to implement a strategy that could eliminate thousands of jobs around the world. Just how many employees would be affected, however, is uncertain.

A company spokeswoman yesterday dismissed a published report that as many as 10,000 Procter & Gamble jobs would be involved. The company employs 102,600 people worldwide, including 47,600 in the United States.

"It's too early to have any numbers," said the spokeswoman, Sydney L. McHugh, commenting on a figure that has been reported for several months in the Wall Street Journal.

It similarly remained unclear how many workers in the Baltimore area would be affected, spokeswoman Kerry Desberg said. Procter & Gamble has about 2,020 workers in the Baltimore area -- 1,800 at its Hunt Valley cosmetics and fragrances operation and 220 at its cleaning products factory near the Inner Harbor.

The recommendations are from a company study aimed at reducing overhead as a percentage of net sales. The final phase of the study, which began in December, is the implementation of recommendations.

While Ms. McHugh declined to cite specific areas that might be )) designated for streamlining, a stock analyst who follows the company, Joseph H. Kozloff of Smith Barney, said he believed the reductions would come from research and development, administration and sales.

Like other analysts, Mr. Kozloff praised the Cincinnati-based company for enacting a program designed to improve efficiency, effectiveness and profits. For fiscal 1992, which ended last June, Procter & Gamble increased earnings by 6 percent, to $1.87 billion, and gross sales by 9 percent, to $29.4 billion.

Brenda Lee Landry of Morgan Stanley predicted that other companies would follow Procter & Gamble's lead. "This is all good," she said of Procter & Gamble's strategy. "They're doing what they have to do to defend themselves and earn rewards for their shareholders."

It appeared yesterday that investors appreciate the program. For the first time in more than a month, Procter & Gamble stock closed above $50 a share on the New York Stock Exchange, gaining $1, to end the day at $50.25, with more than 12.2 million shares trading hands.

The reduction in jobs would be the latest in a series of measures by Procter & Gamble to maintain its competitive edge for scores of products, including detergents, personal-care items and packaged foods.

In recent years, the company has cut its wholesale prices, ended promotional allowances for retailers, sold unprofitable businesses and eliminated weaker lines, like White Cloud toilet tissue, to concentrate on popular brands like Charmin.

The goal of the current study is a three-year plan to reduce overhead as a percentage of net sales from 14.5 percent to 12 percent. That could be done, the company believes, with fewer workers.

The actual cuts, Ms. McHugh said, would occur mostly on a "voluntary basis," meaning that employees would be offered such options as early retirement, buyouts, or a new job, possibly at another location.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.