A brief article in today’s Democrat-Gazette reported the decision by Kimberly-Clark to slash its worldwide workforce by more than 10 percent, eliminating more than 5,000 jobs.
The company has facilities making disposable diapers and other products employing about 700 in Maumelle and Conway. The company has said the cuts will affect all operations. At the proportion announced, that could mean more than 70 jobs in Arkansas.
Noteworthy fact elaborated on elsewhere: these 5,000 job losses were enabled by the recent federal income tax cut. From the Washington Post:
Chief financial officer Maria Henry said the company’s gains from the tax overhaul would help offset the cost of the restructuring plan. The company had an effective tax rate of 28.6 percent in 2017, and the rate would drop to between 23 and 26 percent in 2018 as a result of congressional action, boosting year-over-year earnings growth by 6 points, she told analysts during a conference call to discuss recent financial results.
“We also anticipate ongoing annual cash flow benefits from tax reform,” Henry said. “That provides us flexibility to continue to allocate significant capital to shareholders while we also fund increased capital spending and our restructuring program over the next few years.”
In other words, it’s taking tax savings to its shareholders’ bottom line, not to workers. Note: The one-time bonuses and low-wage worker pay increases announced in some places have been a tiny fraction of the windfall from the tax cut.