Procter & Gamble's Strategic Restructuring: A Value Investor's Playbook?

Procter & Gamble's 2025 restructuring plan—encompassing 7,000 job cuts, brand divestitures, and a leadership transition—has sparked debate among investors about its long-term value proposition. For value-oriented investors, the question is whether these moves signal a compelling buying opportunity amid corporate reinvention.

Strategic Overhaul: Cost Savings and Portfolio Pruning

P&G's restructuring targets non-manufacturing roles, particularly in its Cincinnati headquarters, with buyouts focused on higher-paid Generation X employees Procter & Gamble restructuring explained: See what's being cut^[1]. This workforce reduction, representing 6.4% of its global staff, is expected to generate $1.5 billion in annual pre-tax cost savings by 2026 PG Q2 Deep Dive: Restructuring and Consumer Shifts Define Outlook^[3]. The company is also streamlining its portfolio by exiting underperforming markets, such as Nigeria and Argentina, and narrowing product offerings in Asia for feminine care and grooming Procter & Gamble restructuring explained: See what's being cut^[1]. While specific brands for divestiture remain undisclosed, P&G's history of selling non-core assets—like Vidal Sassoon in China—suggests a disciplined approach to portfolio optimization Procter & Gamble To Eliminate 7,000 Roles, Divest Brands in New Restructuring Strategy^[2].

These moves align with broader trends in the consumer packaged goods (CPG) sector, where companies like Unilever and Colgate-Palmolive are prioritizing “power brands” to drive growth PG Q2 Deep Dive: Restructuring and Consumer Shifts Define Outlook^[3]. By focusing on core categories like beauty, grooming, and home care, P&G aims to enhance operational efficiency and profitability. However, the upfront costs—$1–1.6 billion in restructuring charges over two years—pose short-term headwinds PG Q2 Deep Dive: Restructuring and Consumer Shifts Define Outlook^[3].

Leadership Transition and Strategic Continuity

The appointment of Shailesh Jejurikar as CEO in January 2026 underscores P&G's commitment to internal leadership continuity. Jejurikar, who previously led the Fabric & Home Care division (home to Tide and Ariel), inherits a company poised for transformation. His tenure follows a tradition of promoting from within, a strategy that has historically stabilized P&G's long-term vision Procter & Gamble Replaces CEO Moeller With COO and Long-Time …^[4]. This leadership shift, coupled with the departure of several senior executives, signals a reset aimed at accelerating the restructuring's execution.

Financial Implications and Valuation Metrics

P&G's current P/E ratio of 23.3x is slightly below its peer average of 24.9x but significantly above the Global Household Products industry average of 18.8x Procter & Gamble (NYSE:PG) Stock Valuation, Peer Comparison^[5]. Analysts project a fair value of $198.18, suggesting the stock is undervalued by 21.3% Procter & Gamble (NYSE:PG) Stock Valuation, Peer Comparison^[5]. This discount is further supported by a consensus price target of $171.05, implying a 9.62% upside from its current price of $156.04 Procter & Gamble (NYSE:PG) Stock Valuation, Peer Comparison^[5].

The restructuring's financial impact is twofold: near-term costs and long-term margin expansion. Operating margins, currently at 20.8%, are expected to rise into the “high teens” by 2026 as savings materialize PG Q2 Deep Dive: Restructuring and Consumer Shifts Define Outlook^[3]. Additionally, P&G's commitment to returning $4.4 billion to shareholders via dividends and buybacks reinforces its value proposition PG Q2 Deep Dive: Restructuring and Consumer Shifts Define Outlook^[3]. However, challenges such as Trump-era tariffs—projected to impact $1 billion in earnings—remain a drag PG Q2 Deep Dive: Restructuring and Consumer Shifts Define Outlook^[3].

Sector-Wide Lessons and P&G's Competitive Position

Historical CPG restructurings offer mixed insights. For example, Unilever's spin-off of its ice cream division and Nestlé's reorganization of its waters segment highlight the sector's shift toward portfolio simplification Strategic Divestitures: How Consumer Brands Are Shrinking to Grow^[6]. P&G's approach, however, differs in its emphasis on automation and digital tools to reduce overhead, a strategy that could enhance agility in volatile markets Procter & Gamble restructuring explained: See what's being cut^[1].

Comparative case studies, such as L'Oréal and PepsiCo, demonstrate that companies balancing cost-cutting with innovation tend to outperform. P&G's investment in AI-driven logistics and e-commerce partnerships—contributing to a 23% surge in digital sales in 2022—positions it to capitalize on evolving consumer preferences Procter & Gamble vs Unilever: The FMCG Battle for PG Stock & UL Stock^[7].

Is P&G a Compelling Buy for Value Investors?

For value investors, P&G's restructuring presents a nuanced opportunity. The company's undervalued stock, coupled with a clear path to margin expansion and leadership continuity, suggests potential for long-term gains. However, risks include execution challenges in divesting underperforming brands and mitigating tariff impacts.

The broader CPG sector's trend of “asymmetric vacillation” between centralization and decentralization Asymmetric Vacillation in the FMCG Industry: A Case Study^[8] underscores the importance of strategic flexibility. P&G's focus on core brands and digital transformation aligns with this dynamic, but its success will depend on maintaining consumer relevance amid competition from private-label and digital-native brands.

Conclusion

Procter & Gamble's restructuring is a calculated bet on efficiency, portfolio focus, and leadership continuity. While the near-term costs and market uncertainties warrant caution, the long-term potential for margin expansion and shareholder returns makes it a compelling case for value investors. As the CPG sector continues to evolve, P&G's ability to execute its transformation will determine whether this reinvention translates into sustained value creation.