Procter & Gamble may cut up to 20% of workers By Ted Griffith, CBS.MarketWatch.com Last Update: 4:18 PM ET Mar 21, 2001

CINCINNATI (CBS.MW) -- Procter & Gamble has set up an internal task force charged with coming up with ways to cut the consumer-products giant's costs, the company said Wednesday.

The acknowledgement follows a Wall Street Journal report that said Procter & Gamble is considering slashing up to 22,000 jobs -- the equivalent of 20 percent of its global work force of 110,000.

Spokeswoman Linda Ulrey, while declining to comment on any specific job cuts, said the Cincinnati-based company established a task force several months ago to explore cost reductions.

P&G is pursuing a restructuring program under the name "Organization 2005" in which it has been divesting selected businesses while pursuing other steps aimed at boosting profit margins.

The Journal report said that P&G -- the maker of Tide detergent, Crest toothpaste and other widely-known consumer brands -- is considering substantial staff cuts because of the U.S. economic slowdown and to compensate for past restructuring efforts that didn't cut enough fat.

Ulrey wouldn't say what specifically was being considered as cost-reduction measures or when the task force, led by senior executive Steve Donovan, might make its recommendations.

Douglas Christopher, an analyst at Crowell Weedon, said the news of P&G's cost-cutting plans illustrates that new CEO A.G. Lafley is making headway with his effort to streamline the company.

"He's really looking at every aspect of the operation, whether it's advertising or the number of people needed to manage the business," Christopher said. "This does reflect a lot of progress."

But the analyst also said the reported size of the potential job cuts indicates that P&G hired too many people during the economic good times.

"There is just too much fat apparently," Christopher said. "P&G isn't alone and it won't be the last to cut jobs."

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-- Martin Thompson (mthom1927@aol.com), March 21, 2001