Procter & Gamble (P&G) has announced a significant restructuring plan that will involve cutting 7,000 jobs, constituting approximately 6% of its global workforce, over the next two years. This strategic move, which includes the Tide and Pampers maker exiting certain product categories in specific markets, comes as P&G and fellow consumer goods giant Unilever anticipate muted demand in 2025 due to growing uncertainty related to US tariffs.

Speaking at a Deutsche Bank Consumer Conference in Paris, P&G executives emphasized that this initiative is not a new approach but rather an "intentional acceleration of the current strategy." The aim is to bolster the company's ability to "win in the increasingly challenging environment in which we compete." The economic climate has been notably affected by President Donald Trump’s sweeping tariffs on trading partners, which have roiled global markets and fueled concerns of a potential recession in the United States.

P&G, while producing about 90% of its US-sold products domestically, imports raw ingredients, packaging materials, and some finished products from China. The company projects a pre-tax financial impact of approximately $600 million in its fiscal year 2026, based on current tariff rates. This reflects a broader trend, as a Reuters analysis indicated the trade war has cost companies over $34 billion in lost sales and higher costs, a figure expected to grow.

In April, P&G had already signaled its response strategy, stating it would raise prices on certain products and was prepared to "pull every lever in its arsenal" to mitigate tariff impacts. Chief Financial Officer Andre Schulten identified pricing and cost cuts as the primary levers at that time. Echoing these concerns, Schulten and P&G’s operations head, Shailesh Jejurikar, recently described the geopolitical environment as "unpredictable" and acknowledged that consumers are facing "greater uncertainty."

The announced job cuts will predominantly affect P&G's non-manufacturing roles, representing about 15% of this segment of its workforce. As of June 30, 2024, Procter & Gamble reported having approximately 108,000 employees globally. This restructuring highlights the considerable pressures that global consumer goods companies are navigating amidst ongoing trade disputes and evolving economic conditions.