Colgate to Restructure, Cut Jobs

Colgate-Palmolive Company today announced a four-year restructuring and business-building plan that the company hopes will ensure continued growth in unit volume, sales and earnings per share. About 12% of the company’s 37,000 employees will be affected by the changes.

Colgate executives said the plan includes three major objectives: to further increase the company’s gross and operating profits by generating additional savings; to accelerate innovative marketing and new products via reallocation and enhancement of organizational resources and to maximize the effectiveness of global advertising and commercial investment funds.

Reuben Mark, chairman and chief executive officer, commented, “Our current excellent worldwide sales and unit volume trends, which have continued into the fourth quarter, as well as our culture of continuous improvement, provide a strong base on which to begin this four-year, business- building and profitability-increasing effort. Colgate has steadily increased its gross margin through a myriad of savings programs. Our confidence in the strength of this initiative, overlaid onto our already very successful ongoing programs, allows us to raise our internal goals for annual gross margin growth above the 50-100 basis point goal we have had for many years. After these initiatives get fully underway towards the end of 2005, we will increase our annual goal to 75-125 basis points in gross margin improvement through the rest of the plan years.”

The plan includes some one hundred individual initiatives. “Many of these initiatives are already underway, and others will be in the operational phase shortly,” said Mr. Mark. “With continuous improvement so ingrained in our organizational culture, our operational people around the world feel confident that these initiatives can take place in a seamless fashion throughout our business operations.”