CHICAGO Kimberly-Clark said on Thursday that it would cut about 1,600 salaried jobs, or roughly 3% of its workforce, as it tries to trim costs and respond faster to rivals and store brands.
The latest move comes four years after the maker of Kleenex tissues kicked off a three-and-a-half year cost-cutting plan that included slashing about 6,000 jobs and closing about 20 manufacturing plants.
The plan announced on Thursday does not include closing any facilities. Kimberly-Clark had said in April that it expected to cut jobs in the second and third quarters as it tries to squeeze more costs out of the organization.
Its household products, such as Kleenex and Huggies diapers, have faced stiff competition from lower-cost store brands sold by such retailers as Walmart as consumers cut back. At the same time, its K-C Professional division has been pressured because the restaurants and other businesses it serves have been hit hard by the recession.
The move is "likely a necessary step" to allow Kimberly-Clark to invest in such areas as advertising and promotion as it tries to protect its market share, Sanford Bernstein analyst Ali Dibadj said.
Procter & Gamble in particular, has stepped up its push to grab cash-strapped consumers with lower-priced versions of Bounty paper towels and Charmin toilet paper, as well as a lower-cost line of diapers, Luvs. Kimberly-Clark competes directly with P&G in those categories.