NEW YORK -- Colgate-Palmolive Co., the consumer products giant behind brands like Ajax detergent and Irish Spring soap, plans to cut its worldwide workforce by about 12 percent, or about 4,400 jobs, and close one-third of its factories as part of a four-year plan aimed at boosting its sales and profits. Its stock climbed nearly 8 percent.
The moves, disclosed yesterday, come as the consumer products industry grapples with higher costs in raw materials, gas, and packaging, all of which have put more pressure on profits.
In September, Colgate-Palmolive issued a rare warning that its profits would fall short of expectations because it was facing tougher competition and increased expenses as it headed into the last quarter of the year.
New York-based Colgate said yesterday that it would reduce its global workforce from its current level of 37,000 and close a third of its 78 factories worldwide during the course of the four-year restructuring effort. The savings from those closings would be invested in sales and marketing initiatives.
During a conference call with investors, chairman and chief executive Reuben Mark said that the job cuts would come mostly from manufacturing, and said that factories are being closed worldwide.
Colgate's stock rose $3.78 to close at $50.07 yesterday on the New York Stock Exchange.
Mark said the company expects to meet Wall Street expectations for earnings per share for fourth-quarter 2004, excluding the restructuring and related charges.