Procter & Gamble (P&G) is launching a two-year restructuring plan that will cut brands, automate workflows, and eliminate 7,000 jobs. The move is aimed at reducing complexity and improving supply chain speed and reliability. The company expects up to $1.6 billion in pre-tax costs and $1.5 billion in annual savings.
Shrinking the Portfolio to Expand Margins
The plan includes discontinuing brands by category, country, or product line and may involve divestitures, CFO Andre Schulten said at Deutsche Bank’s Global Consumer Conference. Simplifying the portfolio will allow P&G to consolidate production, reduce costs, and respond more quickly to shifts in demand.
The company cited weakening consumer confidence, tariffs, and broader economic uncertainty as key drivers. Category volumes have declined by 2%, according to Schulten.
The Cincinnati-based giant expects the restructure to cost $1 billion to $1.6 billion before tax, funded largely by cash flow. About 15% of the office workforce will be eliminated as data, automation, and AI absorb routine planning and administrative tasks. Schulten framed the cuts as “eliminating duplication, not capability,” noting that specialists in science-led categories such as fabric and baby care will remain integral to R&D pipelines.
Digitization Anchors Factory-to-Shelf Reset
Procter & Gamble is expanding its use of digital tools to tighten alignment between production and demand, part of a broader effort to streamline operations and cut costs.
In Europe, the company now runs 50 distribution centers through a single cloud-based platform, reducing indirect administrative work by 50% by eliminating site-level hand-offs, Chief Operating Officer Shailesh Jejurikar said. In North America, pilots are underway to connect point-of-sale data directly to production schedules, allowing planners to adjust output within hours. The initiative helped secure P&G’s top-tier ranking in Gartner’s 2025 Supply Chain Top 25.
P&G hasn’t said whether it will extend the European model to U.S. warehouses. But Jejurikar noted that supply network flexibility will be critical if trade policies shift. A leaner product portfolio, now being rationalized, could support that flexibility by reducing variation and making production easier to relocate.
A recent Deloitte analysis highlights that digital supply networks can eliminate the “bullwhip effect” by replacing linear chains with real-time, demand-driven ecosystems. By embedding these capabilities into its operations, from retail-linked production pilots to centralized fulfillment, P&G is moving beyond efficiency. Its factory-to-shelf digitization reflects a broader pivot toward resilience, enabling faster response to demand shifts, policy changes, and supply disruptions.
While peers like Unilever have focused on real-time inventory visibility and demand sensing, P&G’s direct integration of retail data into factory scheduling may give it a structural advantage in speed and execution.
Efficiency Gains Could Test Collaboration Depth
While P&G’s redesign focuses on internal simplification, its success may hinge on how well external partners adapt. As the company consolidates SKUs and production lines, upstream suppliers and logistics providers may face shorter lead times, smaller batch runs, and tighter service windows. Without coordinated forecasting and shared visibility, these changes could strain partner economics and introduce new friction points. Recent supply chain disruptions have shown that resilience isn’t just built inside a single company, it depends on the flexibility and alignment of the entire network.
