The company says the move is one of a number of 'ongoing simplification efforts', designed to make P&G more streamlined and better positioned to maintain profitability in the face of the economic downturn.
Arnold had been tipped as a contender for the top position at the company, currently held by 61 year-old A.G. Lafley, who is set to retire from the company at 65.
She is now all but out of the running as she leaves P&G on the day of her 55th birthday, after 29 years at the company.
P&G's first female president
P&G said that while Arnold steps down as president today, she will continue to report to Lafley on a ‘special assignment’ basis until September.
Described as ‘an architect of the company over the past 20 years', Lafley went on to state that Arnold’s contribution had demonstrated ‘vision, creativity understanding and game-changing innovation’.
Arnold has made a name for herself as one of a handful of leading female executives among the bigger players in the personal care industry, holding positions within P&G that no female had ever held before.
While underlining that Arnold is the company’s first ever female president, Lafley described her as being ‘a role model and coach for women inside and outside P&G’.
Streamlining to protect against downturn
The decision not to replace her reflects the growing need to cut costs as sales growth comes under pressure.
At the beginning of February, P&G announced that sales for its second quarter, covering the all-important holiday season, had suffered from the dual blow of a strong dollar and lower consumer confidence.
Net sales fell 3.2 percent to $20.37bn and organic sales growth was down to 2 percent, contrasting with previous forecasts that organic sales would increase by 4 to 6 percent.