P&G restructuring proves to be costly
reported that further restructuring charges will lead to a net loss
for the next quarter,...
On June 15, Procter & Gamble, the consumer products giant, reported that further restructuring charges will lead to a net loss for the next quarter, reports the Financial Times. Three months ago, P&G unveiled a US$1.4bn programme of job cuts. Now, P&G claims it would have to take a further US$900m in charges for discontinuing under-performing brands and cutting back assets in developing markets. According to Mr. Lafley, P&G's chief executive, the group would no longer be "as patient or as persistent" with under-performing businesses as it had been historically. The latest restructuring will reduce capacity in developing markets for both laundry detergent and paper businesses. Mr Lafley said P&G needed to concentrate on its largest markets and largest customers. P&G also plans to devote more attention to its western European business. The group has suffered more than its Europe-based rivals from the weakening of the euro. Clayt Daley, chief financial officer, reiterated its guidance for earnings from its core business for both the fourth quarter and 2002 fiscal year. Currency movements made earnings difficult to predict, he added. Source: Financial Times