10/25/2012 08:44 EDT | Updated 12/25/2012 05:12 EST

Colgate-Palmolive to cut 6 per cent of workforce by end of 2016

NEW YORK, N.Y. - Colgate-Palmolive will cut more than 2,310 workers, or 6 per cent of its workforce, by the end of 2016 in a push to make the consumer products company more efficient.

Colgate, which is based in New York and has 38,600 employees, wants to streamline global functions and said Thursday that it will continue to cluster single-country subsidiaries into regional hubs.

Savings for the program should total between $365 million to $435 million annually by end of 2016.

The cuts were announced on the same day that the company posted a 2 per cent increase in third-quarter net income as it ramps up advertising. Revenue slipped 1 per cent.

Consumer product companies like Colgate-Palmolive have increasingly looked outside of the U.S. to sustain growth but that has become problematic in recent years. Half of the nations in the European Union are in recession, with unemployment nearing 25 per cent in some. Even China's red-hot economy has cooled.

The stronger dollar is also hitting all companies that do business globally, with U.S. products growing more expensive at the same time that they've had to raise prices to offset higher costs for raw materials.

Colgate-Palmolive's top rival, Procter & Gamble, reported Thursday that its first-quarter net income fell 7 per cent, as costs related to restructuring and the stronger dollar weighed on results. Kimberly-Clark reported Wednesday that its net income rose 20 per cent, helped by cost cuts and lower costs for commodities like fiber and other raw materials.

"We are living in a fast-changing world with many challenges including slowing economies in many countries," said Ian Cook, Colgate-Palmolive's chairman and CEO. "This program will help us to move forward from our current position of strength to continue to deliver sustained, profitable growth over the long term."

The company wants to expand its online capabilities including mobile and social media and e-commerce. It's also investing in research and product development to ensure a "robust pipeline of new products." It also plans to seize emerging markets with targeted programs to increase consumer loyalty and expand distribution.

Colgate-Palmolive reported net income of $654 million, or $1.36 per share for the three-month period ended Sept. 30. That compares with $643 million, or 1.31 per share in the year-ago period.

Revenue slipped 1 per cent to $4.33 billion from $4.38 billion.

Analysts had expected $1.38 per share on revenue of $4.38 billion, according to a poll by analysts.