Dow Chemical Co. joined the growing list of companies announcing massive job cuts, saying it plans to slash about 5,000 full-time jobs, or roughly 11% of its global workforce, amid the global economic slowdown. The company also said it will close 20 facilities in high-cost locations and divest several non-strategic businesses as part of its efforts to reduce costs.
Citing poor current market conditions, the Midland, Mich.-based company also said it will temporarily idle about 180 plants and significantly reduce its contractor workforce worldwide by approximately 6,000 as predicated by reduced operations.
Once fully implemented, the company expects the cost-cutting measures to lead to $700 million in annual operating cost savings by 2010. This is in addition to the $800 million in cost synergies it expects from its merger with Rohm and Haas Co., a provider of specialty materials.
Dow said its transformation to a shared business services group and three business operating models, effective January 2009, will accelerate its ability to shed high-cost assets and centralized functional structures. The new Dow will comprise three different business operating models, namely, Joint Ventures/Asset Light; Performance Products; and Health & Agriculture, Advanced Materials and other Market Facing Businesses. The company said it will provide specific details on the business structures early next year.
Andrew Liveris, Chairman and CEO of Dow Chemical said, "Transformation, by definition, requires a commitment to working differently. We are moving from a highly centralized and standardized approach, to operating three very different business models with a lean and efficient Corporate Center."