Kimberly-Clark To Cut Up To 5,500 Jobs, Close Or Sell Manufacturing Facilities

(RTTNews) - While reporting its fourth-quarter financial results today, Kimberly-Clark Corp. (KMB) announced a new global restructuring initiative, which includes job cuts in a range of 5,000 to 5,500, or 12 percent to 13 percent of current headcount, as well as the closure or sale of about 10 manufacturing facilities.

In addition, the company set a multi-year savings target to its ongoing cost savings program and raised its quarterly dividend by 3.1 percent.

Kimberly-Clark announced the new 2018 global restructuring program to reduce the company's structural cost base by streamlining and simplifying its manufacturing supply chain and overhead organization.

The company expects the restructuring to generate annual pre-tax cost savings of $500 million to $550 million by the end of 2021 and accelerate its return to delivering long-term growth objectives over time.

The program is expected to broadly impact all of the company's business segments and organizations in each major geography. The savings are incremental to the company's ongoing FORCE cost savings program.

The company expects to close or sell about 10 manufacturing facilities and expand production capacity at several others to improve overall scale and cost.

As part of the program, Kimberly-Clark expects to exit or divest some low-margin businesses that generate about 1 percent of company net sales, concentrated in the consumer tissue business segment.

To implement the restructuring program, Kimberly-Clark expects total cash spending of $1,500 million to $1,700 million by the end of 2020.

The company also expects to incur non-cash restructuring charges of $800 million to $900 million pre-tax by the end of 2020, making the total expected restructuring charges $1,700 million to $1,900 million pre-tax, or $1,350 million to $1,500 million after-tax.

Restructuring charges in 2018 are anticipated to be $1,200 million to $1,350 million pre-tax, or $950 to $1,050 million after tax. The company will exclude the restructuring charges when it reports adjusted results in future periods.

Kimberly-Clark also said it has established a cost savings target of more than $1.5 billion over a four-year period from 2018 to 2021 from its ongoing FORCE or Focused On Reducing Costs Everywhere program.

The company noted that its quarterly dividend will now increase to $1.00 per share from $0.97 per share in 2017. The first dividend will be payable on April 3, 2018 to stockholders of record on March 9, 2018.