2024 Transformation Initiative

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

2024 Transformation Initiative

On March 27, 2024, we announced the 2024 Transformation Initiative intended to improve our focus on growth and reduce our structural cost base by reorganizing into three new business segments, making the corporate and regional overhead cost structures more efficient and optimizing our global supply chain. The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4% to 5%. Certain actions under the transformation initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution.

We expect to complete the transition to the new organizational structure by the end of 2024, and the transformation initiative is expected to be completed by the end of 2026, with total costs anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately half of that amount, primarily related to workforce reductions. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets.

The following charges were incurred in connection with the 2024 Transformation Initiative:


	Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
Cost of products sold:
Charges for workforce reductions	$	12	$	46

Asset write-offs	8		13
Incremental depreciation	10		13
Other exit costs	1		4
Total	31		76
Marketing, research and general expenses:
Charges for workforce reductions	48		117
Other exit costs	45		91
Total	93		208
Other (income) and expense, net(a)	—		75

Total charges	124		359
Provision for income taxes	(18)		(102)


Net charges	$	106	$	257

(a)Other (Income) and expense, net includes losses recognized for the exit of certain businesses and markets as part of the transformation initiative.

See Note 9 for charges by segment.

The following summarizes the transformation initiative liabilities activity:


	2024
Transformation initiative liabilities at January 1	$	—
Charges for workforce reductions and other cash exit costs	244
Cash payments	(79)
Currency and other	3
Transformation initiative liabilities at September 30	$	168

Transformation initiative liabilities of $168 are recorded in Accrued expenses and other current liabilities as of September 30, 2024. The charges related to the transformation initiatives are reflected within Operating Activities of our condensed consolidated statements of cash flows.