Kimberly-Clark Announces Revamp to Boost Efficiency and Cut Costs

By Eleanor Harrison Mar27,2024
Kimberly-Clark announces business reorganization, expects $1.5 billion in costs

Kimberly-Clark, a major tissue maker, announced on Wednesday that it will be restructuring into three business units in order to streamline operations and cut costs. The company expects to incur approximately $1.5 billion in related expenses over the next three years, with half of that amount being cash costs. Although the specific number of job cuts was not disclosed, it is likely that workforce reductions will make up a significant portion of these expenses.

This restructuring comes as Kimberly-Clark faces challenges from a number of fronts, including declining sales due to inflation-stricken customers seeking more affordable alternatives and competition from private-label products at retailers. In addition, the company’s supply chain modernization plans aim to generate over $3 billion in gross productivity and $500 million in working capital savings that will be used for growth investments.

The new organizational structure for Kimberly-Clark will consist of its North American business, an international personal care segment, and an international family care and professional businesses. Previously, the company had three business segments with three geographic subdivisions each. These changes are expected to deliver approximately $200 million in selling, general, and administrative savings over the next few years.

Kimberly-Clark expects to complete its transition to the new organizational structure by the end of 2024. The company has also reaffirmed its annual organic net sales and adjusted profit targets provided in January. Despite falling short of fourth-quarter sales and profit estimates earlier this year, Kimberly-Clark’s shares were up 1.5% before the market opened on Wednesday.

By Eleanor Harrison

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