Colgate-Palmolive plans to cut about 4,400 jobs, close factories in restructuring
Tuesday, December 7th 2004, 8:49 am
By: News On 6
NEW YORK (AP) _ Colgate-Palmolive Co., which makes consumer products including Ajax detergent and Irish Spring soap, plans to cut its worldwide work force by about 12 percent, or about 4,400 jobs, and close one-third of its factories as part of a four-year plan aimed at boosting its sales and profits.
The company said Tuesday it would reduce its global work force from its current level of 37,000 and a third of its 78 factories worldwide during the course of the four-year restructuring effort.
It did not say where the job cuts would come, nor did it immediately identify which factories would be closed.
Colgate said the plan would results in charges against earnings of between $550 million and $650 million after taxes over the four years, but would generate savings in the range of $250 million to $300 million annually by the fourth year of the program.
In 2005, the charges are expected to amount to $200 million while the savings should amount to $45 million.
Colgate hopes to improve its financial performance by reducing the number of manufacturing centers with which it does business and managing globally all purchasing from office supplies to media outlets for advertising.
It plans to accelerate marketing innovations and new products especially in markets that it feels have high potential such as Eastern Europe, Russia, China and parts of Latin America and Asia.
The New-York based consumer products maker reported in October its profit fell 10 percent in the third quarter to $329 million, or 58 cents per share, from $365.4 million, or 63 cents last year. Sales rose to $2.7 billion from $2.52 billion a year ago.
Chairman and CEO Reuben Mark said the company expects to meet Wall Street expectations for earnings per share for fourth quarter 2004, excluding the restructuring and related charges. He also reaffirmed earnings per share for 2005 will be within the range of Wall Street's estimates excluding the restructuring and related charges.
He described Colgate's worldwide sales and volume trends as ``excellent'' and said they have continued into the fourth quarter. That will be part of ``a strong base on which to begin this four-year, business- building and profitability-increasing effort,'' he said.
Colgate-Palmolive sells products in over 200 countries around the world. Other brands include Colgate toothpaste, Palmolive dishwashing liquid, Softsoap and Hill's Science Diet pet foods.