Material science giant Dow plans to reduce hundreds of jobs in response to “slower-than-expected” economic conditions, the company said.
The announcement followed the release of the company’s fourth-quarter financial results, which reportedly came in well below analysts’ expectations.
Saving $1 Billion
Dow officials outlined a series of steps that, combined, aim to save about $1 billion in costs on an annual run-rate basis.
The company expects to cut about 1,500 jobs across its global operations, which would represent about 4% of its overall workforce.
The plan also calls for eliminating another $500 million to $700 million in direct costs tied to contract labor and purchased services.
Those two steps would account for the majority of the proposed savings, officials said.
Severance, Benefit Charges
Dow indicated that it would record a charge of between $250 million and $325 million in its current fiscal quarter related to the cost-cutting initiatives. That amount would primarily account for severance payments and other benefit costs.
Aligning Spending
Dow Chairman and CEO Jim Fitterling said in a statement that the cuts would help align the company’s spending with “the realities of the current macroeconomic environment.” He added that the company would take further action “if necessary.”
The cuts followed another $1 billion cost-cutting effort launched by Dow in 2023; about 2,000 jobs were slated to be cut in that effort.
Dow Posted $35 Million Fourth-Quarter Loss
Dow reported a loss of $35 million in the fourth quarter, along with a profit of zero on a per-share basis. Sales were down both in the latest quarter and in the full fiscal year amid a sluggish performance from the company’s packaging and specialty plastics segments.
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