DALLAS (McClatchy) — Millennials aren’t having enough babies. No pressure, but that’s one of the reasons that Kimberly-Clark — maker of Kleenex, Huggies, Pull-Ups, Kotex and Depend — has slashed costs by $1.5 billion over the next four years, including the elimination of 5,000 to 5,500 jobs.
Job cuts that represent 12 to 13 percent of its workforce are across all business segments and geography, Kimberly-Clark said. The company operates worldwide. About half the cuts will be in North America. Job cuts will depend on the needs of the business and negotiations with unions and other labor groups, said spokesman Bob Brand. The Irving headquarters has about 200 employees in corporate functions, including human resources and legal.
The restructuring comes as the Irving-based company Tuesday posted a 22 percent increase in profit, but sales only rose 1 percent and that’s not enough to grow on.
The future cost cuts are on top of $450 million slashed by the consumer products company in 2017.
The new cuts will make the company “leaner, stronger and faster,” said CEO Tom Falk, and make it “even more competitive.” Retailers from Amazon to Walmart are demanding lower wholesale prices and getting them. Bigger retailers are also building and improving their own private brands.
Falk said in an interview with the Wall Street Journal Tuesday that pressure is also coming from an unexpected decline in the U.S. birthrate as millennials delay starting families.
U.S. fertility rates in 2016 hit a record low of 62 births per 1,000 women of childbearing ages of 15-44, according to the National Center for Health Statistics. That was down 1 percent from 2015 and the trend continued in the first half of 2017 and was 60.0 births per 1000 women in the second quarter 2017.
The company reported a fourth-quarter profit of $617 million, or $1.75 a share, versus a profit of $505 million, or $1.40 a share the prior year. Sales rose 1 percent to $4.58 billion from $4.54 billion in the fourth quarter last year.
U.S.-based employers announced 32,423 job cuts in the last month of 2017, bringing the year-end total to 418,770, the lowest annual total since 1990, when 316,047 cuts were recorded, according to a report Tuesday from Chicago-based outplacement firm Challenger, Gray and Christmas. Employers announced 20.5 percent fewer cuts than the previous year, when 526,915 cuts were announced.