Tax bill

[Schneed10]

Originally Posted by Giantone

...and on the other hand.



https://www.nytimes.com/2018/01/23/b...k-layoffs.html

Kimberly-Clark, the maker of Huggies and Kleenex, is laying off about 13 percent of its work force and shedding factories worldwide, amid declining birthrates that are affecting diaper sales and a retail price war that is weighing on profits.

The company said Tuesday that it would cut between 5,000 and 5,500 jobs in an effort to reduce expenses as it faced stiffer competition for consumer staples like tissues, paper towels and wet wipes.

To help pay for the cuts and other restructuring moves, Kimberly-Clark said, it will use savings from the recently enacted corporate tax cut.

OK yeah I think you are having trouble interpreting what you're reading.

They are looking at the underlying demand for their business and seeing it declining - fewer babies equals less need for diapers. That is completely separate from the tax plan. What they're saying is they can't make as much money selling diapers, so there isn't as much income to be taxed going forward.

So they're going to lay people off because they can't sell as much. In order to give out the severances for those layoffs, they'll use savings from the tax bill.

So in other words... they had to lay people off no matter what because not as many people are buying diapers and baby wipes. The tax bill though is enabling them to give better severance packages than they otherwise would have.