American chemical giant Dow Chemical said on July 23 that it would lay off 6% of its workforce and exit uncompetitive assets to cope with the continued impact of the COVID-19 epidemic.
Dow Corporation released a financial report stating that, Revenue in the second quarter was US$8.354 billion, down 24.2% year-on-year; net loss was US$225 million, compared with US$75 million in the same period last year.
As a response, Dow Chemical will further reduce costs and cut 6% of its global workforce.
Currently, Dow Chemical operates 109 manufacturing plants in 31 countries and has 36,500 employees. Based on this calculation, the number of layoffs will be approximately 2,200.
Dow Chemical will further reduce operating expenses, from the previous plan to reduce US$350 million to US$500 million. Dollar.
In addition, Dow will also launch a restructuring plan with the goal of achieving annual EBITDA revenue of more than 300 million by the end of 2021 Dollar.
Dow CEO Jim Fitterling said: “While this is a difficult decision, it comes as the economic recovery gains momentum. At the same time, these measures are necessary to remain competitive.”
However, Jim Fitling said that with the support of China’s economic recovery and “signs of improvement” in the European economy, The U.S. economy showed “positive signs” in June. Data show that Dow Chemical’s trading volume in the Asia-Pacific region increased by 3% year-on-year and 13% month-on-month in the second quarter.
Dow Chemical said market demand for automobiles, construction, furniture and bedding is recovering. The company has restarted two polyethylene plants in Texas and Argentina. Operating rates at the company’s ethylene and polyethylene facilities have returned to year-ago levels.
Previously, Dow Chemical had launched a restructuring plan. On July 6, the company has agreed to sell its rail infrastructure assets and related equipment in six North American petrochemical complexes and enter into long-term service agreements with the buyers.
Dow Chemical Co. CEO Jim Fitterling said in a statement that the deal is a good move for part of a review of Dow Chemical’s “non-product manufacturing assets” in an effort to grow its core business while freeing up cash to pay down debt.
This is not the first chemical company to lay off employees this year.
In February this year, Germany’s Wacker Chemical Group announced that it would lose 1,000 jobs by the end of 2022. Its goal is Annual savings of 250 million euros. That month, Swiss specialty chemicals company Clariant also announced that it would reduce its workforce by 500-600 people in the next two years.
On June 11, British specialty chemicals manufacturer Johnson Matthey stated that it plans to 2,500 layoffs.
Also in June, global coatings giant PPG Industries of the United States announced that it had approved a major and extensive restructuring plan to Reduce its global cost structure. The program includes voluntary separation programs offered in the United States and Canada. </p
