MIDLAND, MICH. (Oct. 24, 2012)—Dow Chemical Co. plans to close about 20 of its worldwide manufacturing sites and cut 2,400 employees.
The news followed the announcement that the company will build a metallocene EPDM plant in the U.S. Gulf Coast region.
Blaming sluggish markets, particularly Europe, the Midland-based company said the restructuring is “designed to accelerate cost reduction actions and advance the next stage of the company's transformation in the midst of persistently slow macroeconomic growth.”
The job losses amount to 5 percent of Dow's total work force. The site closures will result in annual operating cost savings of around $500 million by 2014, Dow said.
The firm added that it would cut capital spending and investment plans in non-core areas amounting to a further $500 million.
“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 Andrew Liveris, Dow chairman and CEO.
The company revealed the restructuring while reporting a 10-percent decline in sales in the third quarter, caused largely by a decline in revenue in Europe.