The American group of consumer products Kimberly-Clark will eliminate between 1,100 and 1 200 jobs by the end of 2016 as part of a restructuring plan announced on Tuesday.
The cuts are expected to affect “all major geographic areas”, and the majority will be completed by the end of next year, according to documents accompanying the conference of the Group’s management and analysts.
This restructuring should allow the owner of Huggies diapers and Kleenex tissues to save the year 120 to 140 million dollars before taxes 2017.
It is also the intention to offset costs related to the separation of its medical branch, which became independent at the end of the month.
“The restructuring program we work on will make our organization more efficient, allowing us to offset the cost impact of separation, and give us more flexibility to invest in future growth,” said the group’s CEO, Thomas Falk said in a statement.
The first savings resulting from the plan should begin to be felt only from next year.
The total cost for the group was $130 to 160,000,000 after tax, of which 85 to 105,000,000 which will be recorded as a restructuring charge in the fourth quarter of 2014.
Two years ago Kimberly-Clark had already announced 1,300 to 1,500 job cuts in Europe, where it had decided to withdraw a large portion of its business in diapers, and other activities with low margin or growth rates, particularly in tissues.
It also decided recently to spin off its medical branch, which will be effective October 31. The shares of the new company, dubbed Halyard Health, to be distributed to the existing shareholders of Kimberly-Clark.
Medical Branch specializes in surgical products and infection control, such as masks, tracheostomy tubes or feeding tubes, for example, as well as in medical devices (for pain management and respiratory aid).
It is the only division of Kimberly-Clark that has seen sales and operating income tumble in the third quarter of, respectively, 2.7 percent to 392 million and 25.7 percent to 52 million, according to results released on the same day.
The whole group reported a net profit up 2.9 percent to $ 562 million.
Its adjusted earnings per share, which is the benchmark on Wall Street, even exceeded by 7 cents the average forecast of analysts, to $1.61.
Revenues for its share grew from 3.4 percent to $5.4 billion, in line with expectations.
For the full year, Kimberly-Clark expects adjusted earnings per share, excluding the health branch of 5.93 to 6.03 dollars. Its previous forecast (6 at $ 6.15) did not take into account the further separation.
At the NYSE, Kimberly-Clark actions gained 0.80 percent to 108.90 dollars at 1:55 p.m. GMT on Tuesday.