NEW YORK (AP) — Colgate-Palmolive will cut more than 2,310 workers, or 6 percent of its workforce, by the end of 2016 in a push to make the consumer products company more efficient.
Colgate, which is based in New York and has 38,600 employees, wants to streamline global functions and said Thursday that it will continue to cluster single-country subsidiaries into regional hubs.
Savings for the program should total between $365 million to $435 million annually by end of 2016.
The cuts were announced Thursday as the company posted a 2 percent increase in third-quarter net income. Revenue slipped 1 percent.
Consumer product companies like Colgate-Palmolive have increasingly looked outside of the U.S. to sustain growth but that has become problematic in recent years. Half of the nations in the European Union are in recession, with unemployment nearing 25 percent in some. Even China's red-hot economy has cooled.
The stronger dollar is also hitting all companies that do business globally, with U.S. products growing more expensive at the same time that they've had to raise prices to offset higher costs for raw materials.
Colgate-Palmolive's top rival, Procter & Gamble, reported Thursday that its first-quarter net income fell 7 percent, as costs related to restructuring and the stronger dollar weighed on results. Kimberly-Clark reported Wednesday that its net income rose 20 percent, helped by cost cuts and lower costs for commodities like fiber and other raw materials.
"We are living in a fast-changing world with many challenges including slowing economies in many countries," said Ian Cook, Colgate-Palmolive's chairman and CEO. "This program will help us to move forward from our current position of strength to continue to deliver sustained, profitable growth over the long term."
The company wants to expand its online capabilities including mobile and social media and e-commerce. It's also investing in research and product development to ensure a "robust pipeline of new products." It is also zeroing in on emerging markets with targeted programs to increase consumer loyalty.
Colgate-Palmolive reported net income of $654 million, or $1.36 per share for the three-month period ended Sept. 30. That compares with $643 million, or 1.31 per share in the year-ago period.
The results include special charges related to the sale of land in Mexico and other costs, Colgate-Palmolive earned $1.38 per share.
Revenue slipped 1 percent to $4.33 billion from $4.38 billion.
Analysts had expected $1.38 per share on revenue of $4.38 billion, according to a poll by analysts.
Colgate-Palmolive said that its global market share in toothpaste and manual toothbrushes are both at record high year to date. The company's share of the global toothpaste market strengthened to 44.9 percent year to date, up 0.6 percent points compared with a year ago. The company's leadership in manual toothbrushes also was further fortified during the quarter, with Colgate's global market share in that category reaching 32.7 percent year to date, up 0.8 percent percentage points compared with a year ago.
North American revenue, which accounts for 18 percent of its business, rose 2.5 percent during the third quarter and prices edged up 0.5 percent. In Latin America, which makes up 29 percent of company sales, revenue were unchanged from a year ago and prices rose 5.5 percent. Revenue from Europe and the South Pacific, which combined account for 20 percent of total business, fell 11 percent, while prices declined 1 percent. In greater Asia and Africa, which makes up about 20 percent of Colgate's revenue, revenue rose 5.0 percent during the third quarter, while prices increased 4 percent.
Shares edged up 41 cents to $106.97 in premarket trading.