Tariffs and economic uncertainty driving the cutbacks at the consumer goods giant
of ConsumerAffairsJune 5, 2025
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The company plans to lay off 6% of its global workforce as part of a major restructuring
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Job cuts come as economic worries and rising tariffs squeeze profits and slow consumer spending
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P&G may raise prices, exit some markets, and shift sourcing to offset inflation and trade costs
Procter & Gamble, the global consumer goods giant behind brands like Tide, Pampers, and Gillette, announced plans to cut up to 7,000 jobs over the next two years roughly 6% of its total workforce as part of a sweeping effort to counter rising costs and flagging consumer confidence.
The layoffs will impact about 15% of the companys non-manufacturing workforce, Chief Financial Officer Andre Schulten revealed Thursday at the Deutsche Bank consumer conference in Paris. The restructuring plan is part of what Schulten called a necessary step to help P&G deliver on its long-term goals despite growing financial headwinds.
It does not, however, remove the near-term challenges that we currently face, he added, the Guardian reported.
P&G, which employs approximately 108,000 people worldwide, said further details including plans to exit some product markets will be shared in July.
Facing Pressure from All Sides
The company is grappling with increased production costs tied to global supply chains and new U.S. tariffs that are affecting raw materials and some finished goods sourced from China. In April, P&G warned that tariffs on items like packaging materials and imported ingredients could force it to raise prices on certain products.
Those pressures come at a time when American consumers are cutting back, spooked by inflation and economic uncertainty. Consumer sentiment in the U.S. dropped in May for the fifth straight month, hitting its second-lowest level in nearly 75 years, according to the University of Michigan’s index.
Meanwhile, a new analysis from the Congressional Budget Office (CBO) this week said that former President Donald Trumps proposed sweeping tariff plan could cut federal deficits by $2.8 trillion over a decade but also lead to higher inflation and lower household purchasing powerparticularly in 2025 and 2026.
Industry-wide warnings
P&G isnt alone in raising concerns. The Consumer Brands Association, which represents household names like Coca-Cola, General Mills, and P&G itself, recently warned that even U.S.-based manufacturers are being hit by tariffs on critical ingredients such as wood pulp for toilet paper or cinnamon for flavoring that are not available in sufficient quantities domestically.
In response, P&G says it is exploring alternative sourcing, ramping up productivity improvements, and reevaluating global operations to adapt.
The company emphasized that while the layoffs are part of a broader cost-cutting plan, they reflect a need to stay agile in an increasingly volatile global market. Schulten said the move is intended to help P&G meet investor expectations while protecting its long-term competitiveness.
With further details expected next month, investors and analysts will be watching closely to see how the worlds largest consumer goods maker navigates a challenging year ahead.
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