Kimberly-Clark Streamlines Operations, Cuts Costs in $1.5 Billion Reorganization Effort

Kimberly-Clark announces business reorganization, expects $1.5 billion in costs

Kimberly-Clark, the well-known tissue maker, recently announced that it will be reorganizing into three business units in an effort to streamline operations and cut costs. The Irving, Texas-based consumer goods company expects to incur around $1.5 billion in related expenses over the next three years, with approximately half of that amount coming from workforce reductions. Although the specific number of jobs to be cut was not disclosed, this restructuring is a response to the challenges faced by the company due to inflation and competition from private label products.

Kimberly-Clark’s new business segments include North America, international personal care, and international family care and professional businesses. Previously, the company had three business segments with three geographic sub-divisions each. The supply chain modernization plans aim to generate over $3 billion in gross productivity and $500 million in working capital savings that will be used for growth investments.

The company expects to complete its transition to the new organizational structure by the end of 2024. These actions are projected to deliver approximately $200 million in selling, general, and administrative savings over the next few years. Kimberly-Clark has also reaffirmed its annual organic net sales and adjusted profit targets provided in January. However, in January, the company fell short of fourth-quarter sales and profit estimates and cautioned that weak retail inventories could result in flat volumes in the first quarter. As a result of the announcement, Kimberly-Clark’s shares were up 1.5% before the market opened.

Leave a Reply