P&G axe hangs over UK jobs

THOUSANDS OF UK jobs were at risk last night as Procter and Gamble, the US consumer products giant, prepared to wield the axe as part of a pounds 1.5bn cost-cutting plan.

Procter and Gamble is due to announce the results of its restructuring programme next week and analysts fear that its UK operations, which employ 6,000 staff, could bear the brunt of the cutbacks.

The UK is one of P&G's key production sites outside the US, employing about a fifth of its entire European workforce. Last week P&G axed 380 jobs in Wakefield.

Analysts expect that the lion's share of the cuts will take place outside the US and say the UK, which has not been chosen as the "global business unit" headquarters, is vulnerable to considerable job losses.

P&G has experienced sluggish growth in several key markets and is in the throes of a reorganisation called Organisation 2005.

Eric Jonnaert, P&G's European spokesperson, confirmed that the group will be holding an analysts' meeting next Wednesday to discuss the first fruits of the restructuring, led by Durk Jager, the new chief executive.

According to reports in the US yesterday, the Cincinnati-based company will cut thousands of jobs and close several underperforming plants, including several abroad.

Mr Jager, a Dutch executive with plenty of experience in Europe and Asia, has pronounced himself unhappy with the company's pipeline of new products, its global structure, and the tendency for corporate thinking to get stuck in a rut.

The new plan, developed over the past year, will involve reorganising the company into seven product divisions, known as global business units rather than geographical units.

Mr Jonnaert confirmed that Brussels would be the headquarters for the fabric and homecare division, which produces leading brands such as Ariel and Fairly Liquid.

Mr Jonnaert said: "This is a major reorganisation in the company. We need to streamline the organisation and give it more focus to compete in a global market."

The restructuring is expected to involve charges of $2-3bn and is in keeping with Mr Jager's reputation for cost-cutting.

He won his spurs by reshaping the company's operations in Japan in the 1980s.

P&G has plants all over the world, and a global workforce of 110,000. It produces leading brands such as Pampers, Tide and Crest toothpaste.

The aim is to sharpen the company's ability to turn new research into products that command market share globally in the shortest possible time.

P&G has been under pressure from rivals such as Unilever, the Anglo-Dutch company chaired by Niall Fitzgerald.