January 23, 2018 / 2:14 PM / 7 months ago

Kimberly-Clark to cut workforce by 12-13 percent, shut facilities

(Reuters) - Kleenex and Huggies maker Kimberly-Clark Corp said on Tuesday it expects to eliminate 5,000-5,500 jobs, or 12-13 percent of its workforce, as part of its global restructuring program.

FILE PHOTO: The logo of Kimberly-Clark is seen in Maracay, Venezuela, July 10, 2016. REUTERS/Carlos Jasso

The company said it expects to close or sell about ten manufacturing facilities and would exit or divest some lower-margin businesses.

The restructuring is expected to broadly impact all the business segments of the company, it said.

The cost-savings program, which will begin in the current quarter, is expected to be completed in two years and the company sees incurring related pretax charges of $1.7 billion to $1.9 billion over that period.

Kimberly-Clark said the program would generate annual pretax cost savings of $500 to $550 million by the end of 2021.

It expects cash costs for the restructuring, mainly related to workforce reductions, to be between $900 million to $1 billion.

The company on Tuesday also reported a near 1 percent rise in fourth-quarter net sales to $4.6 billion, compared with a year earlier.

Kimberly-Clark said it expects net sales in 2018 to improve by 1 percent to 2 percent.

“Although we expect market conditions will remain challenging in the near-term, we plan to deliver better results in 2018 while we begin to implement our new restructuring”, Chief Executive Thomas Falk said in a statement.

Shares of the company, which also raised its quarterly dividend by 3.1 percent, were marginally up at $117.24 in early trading.

Reporting by Sangameswaran S in Bengaluru; Editing by Maju Samuel

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