For P&G, the $10 billion annual ad budget has hurt its margin and reality now seems to have dawned on it. At the company’s earning conference, it announced that as a part of cost-cutting due to flat market shares and growing investor pressure, it plans to eliminate about 1,600 "overhead" or non- manufacturing jobs - including some in marketing – banking on digital marketing to help contain long-term media spending. Earlier this month, P&G announced that it would outsource in-store merchandising work covering about 2,700 employees, most of them part-time, to brokerage firms and expand a programme put in place for some categories two years ago. That reduction affects about 3 per cent of P&G's non-manufacturing workforce of about 50,000.
The company would rely on a combination of attrition, "selective hiring" and restructuring to get to the reductions, which will result in $240 million in annual savings, in line with what P&G typically generates through annual restructuring spending.
Source: The Financial Express