News from RISI – Kimberly-Clark has said it will lay off 1,100 to 1,300 staff after completing the spinoff of its healthcare business by the end of next year, the company said in its 3Q financial call.
The cuts would represent about 3% of K-C’s workforce after the spin off of Halyard Health.
The restructuring programme costs will be $130-160 million, with charges to begin in the fourth quarter of this year and wrapped up by the end of 2016, chief executive Thomas Falk told analysts.
The company showed positive 3Q volume growth, including 3% in global Consumer Tissue, noted Vertical Research Partners analyst Chip Dillon.
A 7% gain in North American tissue “provides evidence that private label competition is not yet impacting K-C’s volumes as it gained market share,” Dillon said.
The company posted a 2% total increase in Personal Care, though a decline in Huggies diapers led to a 1% drop in North America.
A spokesman for K-C told TWM the restructuring will impact all of K-C’s business segments globally and “will primarily impact salaried positions, with very little impact on the company’s production workforce.”
He said: “The recently announced organisation restructuring is aimed at improving the K-C’s overall efficiency and offsetting the impact of stranded overhead costs from the pending spin-off of its health care business.
“The goal of the restructuring is to improve our underlying profitability and further increase K-C’s flexibility to invest in its brands, targeted growth initiatives and capabilities critical to future growth.
“The restructuring is expected to be completed by the end of 2016, and cumulative pre-tax savings are expected to be $120m to $140m by the end of 2017.”