• Tue. May 28th, 2024

Kimberly-Clark Restructuring: $1.5 Billion in Costs, but Streamlined Operations and Reinvested Savings in Sight

BySamantha Nguyen

Mar 27, 2024
Kimberly-Clark Set to Reorganize Business, Face $1.5 Billion in Costs

Kimberly-Clark, a well-known tissue product manufacturer based in Irving, Texas, has announced plans to restructure its operations into three business units in order to streamline operations and reduce costs. The company anticipates approximately $1.5 billion in related expenses over the next three years, with about half of this amount being cash costs. Specific job cuts were not disclosed.

This restructuring is taking place as Kimberly-Clark faces challenges such as declining benefits from price hikes and reduced purchasing by customers due to inflation. Additionally, like its competitors Procter & Gamble and Unilever, the company is experiencing loss of shelf space at retailers to more affordable private-label alternatives. The company’s new segments will consist of its North American business, international personal care, and international family care and professional businesses.

Prior to the announcement, Kimberly-Clark had three business segments with three geographic subdivisions each. The company’s supply chain modernization efforts are expected to yield over $3 billion in gross productivity and $500 million in working capital savings. These savings will be reinvested in growth initiatives. The transition to the new organizational structure is scheduled to be completed by the end of 2024.

Kimberly-Clark expects the restructuring to result in $200 million in selling, general, and administrative savings over the next few years. Despite missing fourth-quarter sales and profit estimates in January, the company remains optimistic about its future performance. Prior to the announcement, Kimberly-Clark’s shares had increased by 1.5%.

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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