The company announced that it will close certain operations, “particularly in Europe”in response to these challenges. Dow will also be reducing purchases of raw materials and looking to reduce logistics and utility costs, according to a statement sent Thursday.
The maker of plastics, chemicals and agricultural products cited macroeconomic challenges as well as higher energy costs. The company said it will bear a cost of between $550 million and $725 million in the first quarter related to these measures, after net sales fell 17% in the fourth quarter.
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The US company joins its European rivals in seeking savings in response to rising energy costs. Germany’s BASF SE last year began a cost-cutting drive and said it would adjust its European production network after facilities on that continent began losing money.
Although the energy crisis has been easing in recent months, the chemical industry is being hit hard and production is falling at its fastest rate since the financial crisis.
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production drops
Germany’s chemical output fell 10% this year and will continue to languish in 2023 as rising gas prices weigh on the country’s industries, according to a producers’ association.
The Dow reduction also adds to a rising wave of corporate job cuts that began with technology companies and has spread to other sectors.
Software maker SAP SE on Thursday announced plans to cut 3,000 jobs this year, a day after International Business Machines Corp. announced another 3,900 cuts.
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As of the end of 2021, Dow said it had about 35,700 full-time employees.
The company’s European headquarters is in Horgen, Switzerland, and it has 37 manufacturing plants in 15 countries in the Europe, Middle East and Africa region, according to its website. the company did not identify specific sites where the cuts will be made.
Source: Gestion
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