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Kimberly-Clark to shed 5,000 jobs as fertility dips

Kimberly-Clark (think Huggies and Kleenex) is expecting to cut an estimated 5,000 jobs - approximately 12% of its workforce - and to get rid of some manufacturing plants. The move comes as part of a restructuring plan in which the company is looking to cut roughly R17 billion worth of costs by 2021.
Kimberly-Clark to shed 5,000 jobs as fertility dips

The restructuring comes at a time of shrinking sales, increased competition and an inability to cover increasing costs. According to the business, one of the big trends affecting sales is the change in family dynamics, more specifically a declining fertility rate. This raises an interesting discussion.

The infographic below, courtesy of Our World in Data, depicts the fertility rate from 1950 to 2015 in South Africa as well as China, India and the United States – which together account for 40% of the approximate 7.6 billion people on earth.

Fertility rates have declined due to the rising cost of living, increasing education, lifestyle changes and improvements in birth control. Take note of the sharp decline in China leading up to 1979 when the one-child policy was introduced as part of population planning. It was formally phased out from 2015.

On the one hand, declining birth rates coupled with a higher average age of first-time parents has helped families increase their education, financial wellness and security. Through education, one's earnings potential increases, and working longer before having your first baby makes it easier to fund the expenses of bringing a human into this world.

Age imbalance

On the flip side, globally we are being faced with an increasing age imbalance. The ratio of elderly dependents to working-age people is declining. Their dependency on the young could become a burden the current working generation cannot bare. In countries like Japan this is well known – see the demographic chart courtesy of IndexMundi.

Going forward this could result in considerable economic challenges which we are currently not making plans for. The burden on the state of elderly populations could be too much bare. Fortunately, South Africa’s age imbalance is not as skewed, fast forward 30 years and we could see something completely different. The time for planning is now.

This article first appeared in Digest.

About Ammaar Sukhadia

Ammaar Sukhadia is a content contributor at Digest, a free email newsletter delivered on weekday mornings explaining financial newsworthy topics and events.

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