Wednesday, October 24, 2012

Giant US corporation Dow Chemical to cut 2,400 jobs, shut 20 plants

Dow Chemical headquarters in Midland, Michigan

Source: Press TV

Largest chemical maker in the US, Dow Chemical, has announced plans to slash 2,400 jobs and shut down 20 plants, citing a slowing economy in Europe and elsewhere.

The corporate giant declared on Tuesday that it was cutting five percent of its workforce worldwide as part of a restructuring plan devised in response to the global economic downturn.

The company’s plant closings would include a number of its European facilities as well as those in Ohio and Michigan. It is said that the cuts will lead to annual savings of USD 500 million by the end of 2014.

Additionally, the company states that its reduction of capital spending and investments will bring a further USD 500 million in savings.

Dow, a Fortune 500 corporation, and other chemical companies are reportedly facing falling demands for chemical products around the globe. Its major corporate competitor in the US, DuPont, has also slashed its earnings forecast and announced 1,500 job cuts.

"The reality is we are operating in a slow-growth environment in the near-term and, while these actions are difficult, they demonstrate our resolve to tightly manage operations, particularly in Europe, and mitigate the impact of current market dynamics," said Dow’s CEO Andrew Liveris in a statement.

Meanwhile, the company's shares fell by 0.7% in after-hours trading on Tuesday.

Dow reported its third-quarter earnings on the same day, posting a 39 percent fall in quarterly profits to USD 497 million, or 42 cents per share, marred by weaker demand and price reductions.

The figures are compared with a profit of USD 815 million, or 69 cents per share in the same quarter last year, or adjusted earnings of USD 729 million, or 62 cents per share in the same time.

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