Kimberly-Clark, a Texas-based company known for its Kleenex tissue products, has announced plans to reorganize its business into three segments in an effort to streamline operations and reduce costs. The company projects about $1.5 billion in related costs over the next three years, with half of this amount in cash costs, including workforce reductions.

The restructuring comes as Kimberly-Clark faces challenges such as shrinking benefits from price increases and reduced customer purchases due to inflation. Like its competitors Procter & Gamble and Unilever, the company is also losing retail shelf space to more affordable private label alternatives. The new organizational structure will consist of North American Business, International Personal Care and International Family & Professional Business.

Previously, Kimberly-Clark had three business segments with three geographic divisions each. The company’s supply chain modernization efforts are expected to deliver over $3 billion in gross productivity and $500 million in working capital savings. These savings will be reinvested in growth initiatives. The transition to the new organizational structure is expected to be completed by the end of 2024.

Overall, the company expects the restructuring to result in $200 million in selling, general and administrative savings over the next several years. Kimberly-Clark has reiterated its annual organic net sales and adjusted profit targets set earlier in the year despite missing fourth-quarter sales and profit estimates in January. Before the announcement, shares of Kimberly-Clark rose 1.5 percent.

By Samantha Johnson

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