BOSTON—Carbon black manufacturer Cabot Corp. will cut approximately 300 positions globally as part of a restructuring that it anticipates will save $50 million in fiscal year 2016, the company announced on Oct. 20.
Cabot president and CEO Patrick Prevost said in a statement that the company was “in need of adjusting cost structure to improve our competitiveness.”
Prevost cited a number of economic challenges for his business, including lower oil prices, slowing demand in Asia and South America and less favorable foreign currency exchange rates.
“These are difficult decisions because we recognize they will impact our valued employees, their families and the communities where we operate,” he added.
The company expects the restructuring plan, which is subject to local consultation requirements and processes in certain locations, to result in a pre-tax charge to earnings of approximately $35 million, mainly comprised of severance and employee benefits. The savings are expected to begin in the second quarter of fiscal 2016.
Prevost expects the restructuring to contribute to Cabot's stated target of delivering an improvement of $0.75 of adjusted earnings per share in fiscal 2016 as compared to fiscal 2015.
“In addition to the restructuring, the company is focused on operational, technological and commercial actions to maintain and extend its global business and technology leadership positions,” Prevost said. “Value creation for our shareholders remains the key objective of our short- and long-term strategy.”
The company, headquartered in Boston, produces rubber and specialty carbons, activated carbon, inkjet colorants, cesium formate drilling fluids, fumed silica, and aerogel.