Kimberly-Clark Corp said on Thursday that it would cut about 1,600 salaried jobs, or roughly 3 percent of its workforce, as it tries to trim costs and respond faster to rivals and store brands.

The latest move comes four years after the maker of Kleenex tissues kicked off a three-and-a-half year cost cutting plan that included slashing about 6,000 jobs and closing about 20 manufacturing plants.

The plan announced on Thursday does not include closing any facilities. Kimberly-Clark had said in April that it expected to cut jobs in the second and third quarters as it tries to squeeze more costs out of the organization.

Its household products, such as Kleenex and Huggies diapers, have faced stiff competition from lower-cost store brands sold by retailers such as Wal-Mart Stores Inc as consumers cut back. At the same time, its K-C Professional division has been pressured because the restaurants and other businesses it serves have been hit hard by the recession.

The move is likely a necessary step to allow Kimberly-Clark to invest in areas such as advertising and promotion as it tries to protect its market share, Sanford Bernstein analyst Ali Dibadj said.

Procter & Gamble Co

, in particular, has stepped up its push to grab cash-strapped consumers with lower priced versions of Bounty paper towels and Charmin toilet paper, as well as a lower cost line of diapers, Luvs. Kimberly-Clark competes directly with P&G in those categories.


Kimberly-Clark said the latest round of job cuts would be in all regions and businesses and mainly impact salaried and non-production jobs.

The company offered a voluntary severance program for U.S. salaried employees this spring which about 600 people accepted, a spokesman said. Those jobs are included in the plan to reduce about 1,600 jobs from the company's total of around 53,000.

Kimberly-Clark expects to record charges of $140 million to $150 million, or about 25 cents per share. About $110 million of those charges are slated for the second quarter.

It expects to see savings of about $60 million, or 10 cents per share, during the second half of the year.

In another effort to save, Kimberly-Clark decided earlier this year to freeze pension plan benefits for U.S. non-union employees.

Shares of Kimberly-Clark fell 0.6 percent to $51.46 in morning trade.

The shares slipped 1.8 percent from the beginning of the year through Wednesday, outperforming P&G, whose shares fell 11 percent in that period.

(Reporting by Jessica Wohl, editing by Dave Zimmerman)