The revised figure represents approximately 3 percent of the company’s global workforce and also underlines its urgent need to cut costs as part of aims to increase profitability in the face of the economic downturn.
The company says that the losses will be worldwide and from all its business segments, while primarily affecting salaried and non-production staff. It also added that there will be no expected closures of manufacturing facilities.
Charges and annual savings
The company says that the cuts will incur charges of between $140m - $150m and are expected to bring yearly savings of about $150m, a measure that will help to alleviate the company’s strained cash flow and profitability, particularly in the second half of the financial year.
“Through these changes we will be a more effective organization, with faster decision-making helping to drive efficiency throughout all aspects of our operations,” said company CEO Tom Falk.
“In addition, by increasing our cash generation, we will be in a better position to take advantage of future growth and innovation opportunities.”
Revised job loss figure
Two weeks ago the company announced that it was cutting 600 jobs in June through redundancy packages, adding that it wanted to target a reduction of 1,000 in its head count this year.
At the time, a spokesperson for the company said that the 600 staff had already accepted the terms of the package and that they would be leaving by the end of the month.
The cutbacks build on another announcement in April of this year that the company was offering voluntary severance packages to 7,000 of its worldwide workforce.
First quarter hit by ‘challenging’ conditions
The company’s performance in the first quarter of 2009 was hit by the weak global economy and negative currency effects, according to CEO Thomas J Falk.
"Business conditions in the first quarter proved to be somewhat more challenging than we predicted earlier this year, with significant headwinds from weak global economies and volatile currency fluctuations impacting our results,” said Falk when the results were released back in April.
In the personal care sector sales fell by 3.4 percent from $2.05bn to $1.97bn with performance in Europe dragging the figures down.