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Procter & Gamble Cuts Jobs During Period of Success

Procter & Gamble (NYSE: PG) will cut as many as 5,700 jobs, despite the fact that Wall St. is impressed by the company’s success. Its shares trade at a two-year high, up 25% over that period. The expense reduction move is another example…

By Douglas A. McIntyre
Published February 24, 2012, 6:43am ET · 2 min read

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Procter & Gamble (NYSE: PG) will cut as many as 5,700 jobs, despite the fact that Wall St. is impressed by the company’s success. Its shares trade at a two-year high, up 25% over that period. The expense reduction move is another example of how a large corporation takes jobs out of the economy despite doing well financially.

CEO Bob McDonald says he is compelled to save the $10 billion that new expense reductions will cause. As an aside, it is worth noting that McDonald made $16.1 million last year, and his compensation has increased each of the past two years. The reason for the broad cuts is that the company has reached a slow growth period in the U.S. and EU. That should be expected in Europe, as the economy deteriorates there. However, according to P&G’s last 10-Q, revenue grew across all of the firm’s major divisions. Total sales rose 4% to $22.1 billion in the most recently reported quarter, a performance that is fairly strong given the duration of the last recession.

There has been a great deal of talk recently about how large American companies might help improve the U.S. jobs base. The President’s Council on Jobs and Competitiveness has this as a specific goal. McDonald is not a member of the council, but his predecessor at P&G, A. G. Lafley, is. The committee has its work cut out for it when an American firm like P&G is willing to cut jobs when its financial fortunes are relatively robust.

Douglas A. McIntyre

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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