Colgate-Palmolive to eliminate 4,400 jobs

NEW YORK — Colgate-Palmolive Co., the consumer products giant behind brands like Ajax detergent and Irish Spring soap, plans to cut its worldwide work force by about 12 percent, or about 4,400 jobs, and close one-third of its factories as part of a four-year plan aimed at boosting its sales and profits. Its stock climbed nearly 8 percent.

The moves announced Tuesday come as the consumer products industry has been grappling with higher costs in raw materials, gas and packaging, all of which have put more pressure on profits.

Colgate-Palmolive also faces increasing competition from larger rival Procter & Gamble Co. which has taken big bites of the market with an increased focus on skin-care and beauty products as well as pet care products.

In September, Colgate-Palmolive issued a rare warning that its profits would fall short of expectations as it faces tougher competition and increased expenses as it headed into the last quarter of the year.

New York-based Colgate said Tuesday it would reduce its global work force from its current level of 37,000 and close a third of its 78 factories worldwide during the course of the four-year restructuring effort. The savings from those closures would be invested in sales and marketing initiatives.

During a conference call with investors, chairman and CEO Reuben Mark said that the job cuts would come mostly from manufacturing, and said that factories —both general plants and special purpose plants — are being closed worldwide. He added that notifications were being issued Tuesday, but didn’t identify the facilities.

The news sent Colgate’s stock up $3.78 to close at $50.07 Tuesday on the New York Stock Exchange.

Burt Flickinger III, managing partner at Strategic Resource Group, a New York-based industry consulting group, said the new plan is a “strong initiative but it is too little, too late.”

“Colgate has been milking its worldwide brands for far too long, for both its sales and marketing,” he added. “As Colgate’s brands have been undermarketed, it is much easier for retailers’ private label and other rival brands to undercut Colgate.”