Dow to cut jobs, close plants in latest cost saving drive, with focus on Europe
LONDON (ICIS)–Dow plans to cut 2,000 jobs from its workforce and close plants, potentially in Europe, as part of its $1bn 2023 cost saving drive, it said on Thursday.
“We are taking these actions to further optimise our cost structure and prioritise business operations toward our most competitive, cost-advantaged and growth-oriented markets, while also navigating macro uncertainties and challenging energy markets, particularly in Europe,” said CEO Jim Fitterling.
Dow said that structural cost improvements of $500m would relate to a global workforce reduction of approximately 2,000 roles and increased productivity. It specified “Shutting down select assets, while further evaluating Dow’s global asset base, particularly in Europe, to ensure long-term competitiveness and enhance cost efficiency.”
Operating expense reduction in the plan total $500m with a drive to decrease plant turnaround spending, cut purchased raw materials, logistics and utilities costs and “Aligning spending levels to the macroeconomic environment.”
The company will take charges in the first quarter of 2023 of between $550m and $725m for costs associated with the cutbacks and asset write-downs and write-offs.
It said that longer term it remains on track to grow underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) by more than $3bn by 2030 and cut its carbon emissions by 30% from a 2005 baseline. It aims for carbon neutrality by 2050.
In 2022, Dow’s EBITDA fell by 24% by $9.3bn with a 57% year on year slump in the fourth quarter. Dow’s volumes in Q4 2022 were down 8% globally but 18% lower in its Europe, the Middle East, Africa, and India (EMEAI), region.
This will reduce Dow’s workforce, which currently stands at 35,700, by 6%.
Thumbnail image shows Dow company name on floor of New York Stock Exchange (credit: Richard Drew/AP/Shutterstock)
Recasts to include total number of Dow employees and the percentage of jobs to be cut.
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