Procter and Gamble names No. 2 exec, overhauls corporate structure
Published 5:20 PM EST Nov 8, 2018
Procter & Gamble announced Thursday chief financial officer Jon Moeller will become chief operating officer and vice chairman starting in July amid a wider overhaul of its corporate structure.
The reorganization appears to be a nod to hedge fund investor and new board member Nelson Peltz, who last year waged the largest proxy fight in history demanding P&G cut bureaucracy, downsize corporate jobs and shift functions into business units.
The Cincinnati-based consumer products giant said it will shift 60 percent of its corporate employees into six new “sector business units.” They are: beauty, baby & feminine care, fabric & home care, family care, grooming and health care.
Starting July 1, the unit heads will oversee 80 percent of the company’s sales and their respective products from development to sales.
“This is the most significant organization change we’ve made in the last 20 years,” said CEO David Taylor, adding the changes will make the company more agile and productive.
P&G officials said the changes would not mean layoffs or mass moves of employees. The company employs 10,000 in Greater Cincinnati.
The changes make Moeller P&G’s No. 2 executive, but also grant the sector heads the title of CEO of their respective divisions. P&G officials said Moeller’s enhanced role doesn’t necessarily make him a successor to Taylor.
The last time P&G had a chief operating officer was when Robert McDonald held that title prior to serving as CEO from 2009 to 2013.
Unless P&G returns to consistent growth, however, analysts aren’t sure P&G’s next CEO will come from within the company.
Moeller will remain P&G’s top accountant, but expand his responsibilities to include some operations. He will assume responsibility for geographic markets outside of the sector units’ focus. Those will be countries mostly outside major markets, including the U.S., Canada, China, Japan, U.K., Germany, France, Spain, Italy and Russia.
P&G will retain its research & development as a corporate function. During Peltz’s proxy campaign, he advocated breaking it apart and moving it into business units.
P&G to raise Crest, Dawn, other prices in January
In August, P&G disclosed it has shrunk its worldwide payroll to 92,000, the smallest since the 1990s.
P&G has cut 36,000 jobs since it first announced major layoffs in the spring of 2012. That’s a nearly 29 percent headcount reduction achieved through a combination of layoffs and business unit sales.
P&G CEO defends adding Nelson Peltz to the board
P&G has been restructuring since 2012 as it seeks to jump-start sales and profit growth. Peltz joined the board this spring, after both sides settled following the proxy fight that ended in a legal stalemate.
Taylor has pledged another $10 billion in cost cuts by 2021. A major portion of those savings will come from P&G’s move to fewer, larger and more automated factories.
For the latest on P&G, Kroger, Fifth Third Bank and Cincinnati business news, follow @alexcoolidge on Twitter.
- Activist Starboard Value halves its stake in Newell: filing
- Proxy advisory firm ISS favors vote for Third Point nominees at Campbell
- Johnson & Johnson quarterly profit beats on higher pharma unit sales
- Third Point gains ISS, Glass Lewis support in Campbell proxy fight
- BlackRock voted to replace Tesla’s Musk with independent board chair