Dallas, Texas, USA, 25 June 2009 -- Kimberly-Clark Corporation (NYSE: KMB) today announced actions designed to improve its competitive position and become a stronger, faster, and leaner organization. The company said it will reduce its worldwide salaried workforce by approximately 1600 positions by the end of the year.
In light of the challenging business environment, the company previously indicated it was preparing plans to streamline its organization and that it would accelerate its cost reduction programs, particularly for sourcing and supply chain activities.
The organizational changes announced today are expected to generate annualized pre-tax savings of about USD 150 million, further strengthening Kimberly-Clark's profitability and cash flow. Anticipated savings of approximately USD 60 million, or 10 cents per share, will benefit the company's results during the second half of 2009. Severance and related costs to streamline the organization will be recorded during the second, third, and fourth quarters of the year, and will total USD 140 million to USD 150 million pre-tax, equivalent to about 25 cents per share. Approximately USD 110 million of the costs will be recorded in the second quarter.
"These actions, while difficult, are necessary to help us emerge from this demanding economic environment as a stronger company," said Tom Falk, Kimberly-Clark chairman and CEO. "Through these changes we will be a more effective organization, with faster decision-making helping to drive efficiency throughout all aspects of our operations. In addition, by increasing our cash generation, we will be in a better position to take advantage of future growth and innovation opportunities."
Reductions in the workforce will come from all regions and business segments of Kimberly-Clark's global operations and will primarily affect salaried and nonproduction jobs. The company does not plan to close any of its manufacturing facilities as part of these actions.
The effects of today's announcement on 2009 results were not included in the company's previous earnings guidance. Guidance will be updated in Kimberly-Clark's second quarter earnings announcement on 23 July.
Kimberly-Clark and its global brands are an indispensable part of life for people in more than 150 countries. The company's health and hygiene products are sold in more than 80 countries. To keep up with the latest K-C news and to learn more about the company's 137-year history of innovation, visit www.kimberly-clark.com.