Makers of Kleenex, Huggies plan to cut 5,000 jobs

CHICAGO— As companies move to boost jobs and pay in the wake of the U.S. tax overhaul, Kimberly-Clark is going in the opposite direction.

The producer of Kleenex tissues and Huggies diapers is cutting 5,000 to 5,500 workers — or 12 to 13 per cent of its head count — as part of a drive to reduce costs and boost margins amid uneven revenue growth and higher material costs. Kimberly- Clark will also close or sell about 10 factories while expanding production at other sites, according to a statement.

It’s also looking to exit or sell some low-margin businesses that make up approximately 1per cent of company sales.

The cutbacks threaten American factory jobs at a time when the Trump administration is trying to reinvigorate the manufacturing economy. The company didn’t lay out where the jobs would be eliminated, other than saying they would hit every major region where it does business. CEO Tom Falk said the changes will make the company “leaner, stronger and faster.” He pledged better results in 2018, even as market conditions will remain “challenging in the near-term.”

Kimberly-Clark sees the job cuts and restructuring creating annual cost savings of $500 million to $550 million (U.S.) by the end of 2021. It foresees total pre-tax restructuring charges in a range of $1.7 billion to $1.9 billion.

The company also reported mixed fourth-quarter results on Tuesday.

Its adjusted profit of $1.57 per share was 3 cents better than what analysts polled by Zacks Investment Research predicted.

But revenue of $4.58 billion was slightly below Wall Street’s expectations.

The shares rose 0.8 per cent to $117.87 in New York Tuesday.

In the wake of the U.S. government’s move to slash corporate taxes, a series of companies have boosted pay and announced plans to expand production in the U.S.

Kimberly-Clark’s annual sales declined for the three-year period between 2013 and 2016, according to FactSet.

But annual sales rose slightly in 2017 from the prior-year period.