Henkel: Blaming Raw Material Costs For Staff Reductions

It looks like it's not just US companies struggling with commodity price inflation (whose effects are compounded by a weak dollar). Even European companies -- who have the support of a strong Euro behind them to increase purchasing power -- are feeling the pain of rising raw material costs. Henkel KGaG, a German-based CPG company, and maker of Dial soap, is blaming the overall commodity price environment for having to lather away headcount. According to Bloomberg, Henkel "will cut as many as 3,000 jobs to sustain earnings growth as raw-material costs rise."

The same article notes that "higher costs for oil and other commodities are weighing on earnings growth across the consumer-products industry ... Clorox Co., the maker of Glad trashbags and its namesake bleach, reported a drop in profit this month as the increasing price of crude made plastic bottles more expensive to produce." Having just come back from a Costco run, I can anecdotally say that a number CPG providers are passing on rising costs to shoppers. But clearly, they're still taking a hit in some areas.

- Jason Busch

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