The HALEON PLC (LON: HLN) share price has fallen 8.51% in the past three months as investor sentiment towards the company shifted to the negative. The decline has left many wondering what comes next for the consumer healthcare company.
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Firstly, recent news reports indicate that the company is keen to slash costs by reducing its global workforce of 24,000 employees to a smaller number. Over the next three years, the company intends to cut its operating costs by £300 million ($393 million).
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Despite the cost-cutting measures, the global consumer healthcare company expects to incur restructuring costs worth £150 million in 2023 and 2024 full year. Hence, the firm must find other ways to reduce operating costs, like firing employees.
Haleon has not announced the exact number of employees that will be made redundant but has started a consultative process in all relevant markets regarding which employees will be let go and those who will stay with the company.
A Haleon spokesman stated: “We've announced internally a number of changes across our global business this week, as we continue to evolve Haleon into a more agile organisation. As we enter a process of consultation in relevant markets, we are fully committed to supporting colleagues that may be impacted.”
Haleon’s bottom line has come under immense pressure driven by the higher input costs that have eaten into its margins due to the record-high inflation witnessed in most countries globally. However, the company plans to pass on the extra costs to consumers.
Still, there is a limit to how much extra consumers can pay for its consumer health care staples products such as its Sensodyne toothpaste and Advil painkiller. While these are sticky products, higher prices might force consumers to purchase cheaper alternatives.
For example, customers in most developing countries may be unable to pay for the higher-priced consumer health products from Haleon and other global conglomerates. Instead, they may prefer to purchase much cheaper generic drugs or alternative products.
*This is not investment advice.
Haleon share price.
The Haleon share price has fallen 8.51% in the past three months as sellers took over. What’s next for the firm?
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.