Dow Chemical to slash 2,400 jobs, close 20 plants

Associated Press Modified: October 23, 2012 at 11:00 pm •  Published: October 23, 2012
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MIDLAND, Mich. (AP) — The Dow Chemical Co. will eliminate about 2,400 jobs and close roughly 20 manufacturing facilities as part of a restructuring plan aimed at coping with slowing economic growth in Europe and elsewhere.

The manufacturing giant said Tuesday that the job cuts amount to 5 percent of the company's workforce worldwide.

Dow expects the strategy will result in roughly $500 million in annual cost savings by the end of 2014.

The company also plans to slash capital spending and investments. It expects that will save an additional $500 million.

All told, Dow anticipates it will save $2.5 billion, including other cost-cutting measures.

Dow produces materials used in nearly every business sector and region of the world, leaving it exposed to shifts in global economic growth.

Late Tuesday, the company issued its third-quarter earnings report that had been expected to come out Thursday morning.

It reported a nearly 40 percent drop in net income to $497 million, or 42 cents a share, from $815 million, or 69 cents a share, in the same quarter last year.

It said revenue dropped 10 percent, to $13.64 billion, led by a 10 percent decline in Europe.

Analysts had been expecting the company to earn 37 cents a share on $14.18 billion in revenue, according to FactSet.

The company's business has been hurt by Europe's debt crisis and slower growth in China. Manufacturers, construction businesses and some transportation customers have reduced demand for Dow products. The company's coatings and materials for electronic devices also have been weak.

"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," Andrew Liveris, Dow's chairman and CEO, said in a statement.



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