BERLIN — Wella announced it will cut 1,200 jobs in light of a cooperative supply chain contract signed with Procter & Gamble Wednesday.
The contract will consolidate both companies’ activities in production and distribution, and aims to improve efficiency and build synergies between the two firms, as well as address overcapacity, Wella said in an official release. Several production centers will be closed worldwide, in favor of joint production sites in strategic areas.
In the U.S., P&G’s Clairol headquarters, based in Stamford, Conn., will remain open as Global Retail Hair Color Headquarters and manufacturing facility for most of Clairol-Wella North America. The site, which staffs 750 employees in research and development, manufacturing, business operations, marketing and external relations, will consolidate two facilities into one building. P&G will sell the other building to the city of Stamford; it is slated to become a public school.
Prior to the decision of keeping the Stamford site, it had been rumored for nearly six months that the facility would be shut down.
Rob Matteucci, president of Clairol, stated in a release that the company is “delighted that these decisions represent a win for [Stamford] along with an ongoing Clairol-P&G presence in Stamford.”
However, the Stamford plant will launch a cost and productivity optimization program which will lead to a reduction of approximately 285 positions over the next three years, a number a company spokesperson said would be achieved first through attrition, then retirement, which also includes natural head count reduction.
The consolidation of Wella Hair Care production volume in North America into P&G sites will also result in the closure of Wella plants in Richmond, Va., and Mexico City.
Together, Wella and P&G currently employ about 13,000 people in production and distribution in the areas of beauty care and prestige and professional care.
P&G said that, generally speaking, severance packages will be offered, including cash payments, continued benefits for a period of time, outplacement assistance, and a retraining allowance.
As a result of the supply chain consolidation, Wella also announced that Emil Kiessling GmbH, a Wella subsidiary based in Georgensmünd, Germany, that specializes in private label production, will be sold.
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