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Articles with HMA Quotes GILLETTE LOSING 40% OF ITS TOP MANAGERS
The Boston Globe
Business
By: Jenn Abelson, Globe Staff
7 December 2005
Third Edition
Page D1
© 2005 New York Times Company. Provided by ProQuest Information and Learning. All Rights Reserved.
About 40 percent of Gillette Co.'s top executives and managers are leaving or have left the Boston shaving giant as Procter & Gamble Co. completes its takeover, according to the company.
Of Gillette's 135 high-level managers, about 53 have departed. Some retired, others turned down jobs, and some were not offered positions at the newly combined company.
Many executives, however, are staying. About 82 Gillette employees have accepted jobs or transitional roles at P&G, including former Gillette chief executive James M. Kilts, who will stay for a year to head a new global business unit in Boston.
"We are trying to have the organization set as quickly as possible," said Eric Kraus, a Gillette spokesman. "We want people to know their future with the company going forward."
The $54 billion acquisition, approved by federal regulators in October, is projected to result in an estimated 6,000 job cuts or about 4 percent of the combined company's workforce of 140,000. P&G spokeswoman Linda Ulrey would not provide an update on positions eliminated from the Cincinnati-based consumer-products behemoth.
In an interview with the Globe in October, P&G chief executive A.G. Lafley said he did not know how the job reductions would be distributed by city or company, but said the firms are in the process of going through each level and selecting "the best of the best." He added, at the time, that every Gillette employee would know his or her status within six months of the closing of the deal.
The bulk of the job cuts are expected to come over the next few months. All Gillette employees who are laid off because of the merger will receive severance pay based on job type, years of service, and age, along with outplacement services.
Generally with mergers and acquisitions, at least half of the top management team leaves, said Dave Hardie, managing director for the executive search firm Herbert Mines Associates in New York. Moreover, some of P&G's recent takeovers, including the $5 billion purchase of hair care business Clairol, resulted in almost the entire management team leaving the company.
"It's a little surprising that the number of top Gillette employees being retained and staying on is about 60 percent," Hardie said. "Gillette's a very successful company with a strong brand and expertise in male consumers that P&G doesn't have."
The P&G takeover creates one of the world's biggest consumer products companies and brings together powerhouse brands, including P&G's Pampers diapers and Tide detergent with Gillette's razors and blades and Oral-B toothbrushes. Federal regulators approved the deal, but required the newly combined company to sell Gillette's Right Guard deodorant line and Rembrandt teeth-whitening business, to address anticompetitive concerns.
Several Gillette executives who left have taken jobs with other consumer products companies and retailers. Last month, Gillette's former chief financial officer, Charles Cramb, joined the beauty company Avon Products Inc. as its top financial executive. Earlier this fall, Joseph Scalzo, Gillette's former group president of the Personal Care and Global Value chain, became chief executive of WhiteWave Foods, the maker of Silk Soymilk and Horizon Organic milk.
Richard K. Willard, who was Gillette's general counsel, joined pharmaceutical giant Bristol-Myers Squibb Co., as general counsel. James D. White, Gillette's former senior vice president for business development, North America, was appointed senior vice president of corporate brands for the food and drug retailer Safeway Inc. And next month, Scott O'Hara, Gillette's senior vice president of Europe for Gillette Group International, will take on a new role at H.J. Heinz Co. as executive vice president for Asia Pacific and other regions.
Because other Boston-area companies have been taken over in the past few years, including Reebok International Ltd., former Gillette employees will face challenges if they want new jobs in the region especially if they have family or other obligations that prevent them from moving, Hardie said.
"It's kind of the perfect storm," Hardie said. "It's painful having a brain drain, but remember that some of the Gillette folks came to Boston over the last few years, so they were temporary brains. There's ebb and flow all over the country."
Jenn Abelson can be reached at abelson@globe.com.
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