Consumer Goods | Layoffs Mounting

Consumer goods companies are planning more layoffs than all other industries this year due to company reorganizations, rising commodity prices and weak consumer spending, according to Chicago-based outplacement firm Challenger, Gray & Christmas.

Companies such as Procter & Gamble, PepsiCo and Kraft Foods announced a total of 18,438 job cuts in the first quarter of 2012, up from 4,571 in the first quarter of 2011. Other consumer goods companies that have announced layoffs this year include R.J. Reynolds Tobacco and the Conyers, Ga.-based Acuity Brands subsidiary Lithonia Lighting.

“We’ve seen some of these companies restructuring for the years ahead and we’ve also seen companies closing down product lines that have become outdated.” said John Challenger, chief executive of Challenger, Gray & Christmas. “Consumer spending is not as strong as these companies need it to be and higher commodity costs are having an additional impact on their bottom lines.”

The rise of using food for fuel over the past decade, including corn for ethanol, has caused food prices to become more volatile, said Alexia Howard, a Sanford C. Bernstein analyst who covers Kraft. Unpredictable price changes have put “a significant amount of pressure on company margins” for the companies that sell food products, she said…

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