Dow axes 5,000 jobs
Dow Chemicals has announced that it is to cut 11% of its current workforce eliminating approximately 5,000 full time jobs. In addition, the company intends to close 20 production plants in high-cost areas and temporarily idle 180 others. The affected plants, which represent approximately 30% of Dow’s plants worldwide, are evenly split between the US and Europe.
Dow Chemicals has announced that it is to cut 11% of its current workforce eliminating approximately 5,000 full time jobs. In addition, the company intends to close 20 production plants in high-cost areas and temporarily idle 180 others. The affected plants, which represent approximately 30% of Dow’s plants worldwide, are evenly split between the US and Europe.
According to Andrew Liveris, Dow’s chairman and ceo, the new measures will help fund the company’s all-cash takeover of speciality chemicals supplier Rohm & Haas.
The move is likely to cost Dow $700m in severance payments and charges related to plant shutdowns. However, the company is hoping to make this back in operating cost savings by the end of 2010.
As well as job and plant cuts, Dow aims to reduce working capital requirements by $2bn through a combination of tighter working capital management and as a reflection of lower feedstock and energy costs. Combined with the company’s pledge to reduce capital spending by $600m versus 2008 levels, Dow estimates a $2.5bn reduction in its cash requirements through 2009.
