Kimberly-Clark Corp. reported moderate gains in third-quarter revenue and net income Tuesday and said it planned to cut its workforce by more than 1,000.
The restructuring program, to improve efficiency and offset some overhead costs related to the spin off of K-C’s health care business, is expected to cost between $130 million and $160 million after tax and be completed by the end of 2016. Cumulative pre-tax savings are expected to be $120 million to $140 million by the end of 2017.
In a statement, CEO Tom Falk said the restructuring will give the Irving, Texas, company additional flexibility to invest for future growth. “This effort is further evidence of how we manage our company with financial discipline and our commitment to generate attractive returns to shareholders,” he said.
Total job cuts are expected to be between 1,100 and 1,300 and occur primarily among salaried employees. In an interview, Falk said the cuts would be broadly based, impacting every business and every region where the company operates.
Kimberly-Clark currently employs about 57,000. The company expects to spin off its health care business – called Halyard Health – on Oct. 31. After that, K-C employment will be about 42,500.
In the third quarter, Kimberly-Clark reported revenue of $5.44 billion, up 3.4 percent from the year-earlier period. Net income was $562 million, up 2.9 percent.
For the full year, K-C said it expected adjusted earnings per share in the range of from $5.93 to $6.03. That includes a 10-cent per share impact from the spin-off for 2 months of health care earnings. Previous guidance was from $6 to $6.15 and included a full year of health care results.
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