BOSTON—Cabot Corp. plans to cut about 300 jobs as part of a global restructuring plan.
Cabot estimated it will save about $50 million in fiscal 2016, compared to fiscal 2015, by restructuring its operation. The firm's fiscal year begins Oct. 1 and ends Sept. 30. It launched the cost-cutting program Oct. 20, a company spokeswoman said.
Cost savings as a result of the restructuring plan are expected to begin in the second quarter of fiscal 2016 for the rubber carbon black, specialty chemical and performance materials producer.
Impacted employees are at locations spread around the world, the spokeswoman said. “This is a company-wide restructuring that impacts all geographies, all segments, and regional and functional resources.”
Plant closures are currently not part of the plan, she said.
President and CEO Patrick Prevost said the need to adjust the company's cost structure was prompted by challenging macroeconomic conditions and competitive pressures facing the firm's businesses, citing in particular 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 said.
Cabot said it expects the restructuring plan, which is subject to local consultation requirements and processes in some locations, will result in a pre-tax charge to earnings of about $35 million, mainly covering severance and employee benefits.
Net cash outlays related to the company's restructuring actions are expected to be about $30 million, most of which is expected to be paid during fiscal 2016.
“This restructuring plan will contribute to our stated target of delivering an improvement of 75 cents of adjusted earnings per share in fiscal 2016 as compared to fiscal 2015,” according to Prevost.
Planned restructuring actions also are intended to make the company a more efficient and effective operation, the spokeswoman said.
Prevost said that in addition to restructuring its operations, the Boston-headquartered company is focusing on operational, technological and commercial actions aimed at maintaining and extending the firm's strong global business and technology positions.
“Value creation for our shareholders remains the key objective of our short- and long-term strategy,” he said.
Because of the challenging environment in which it operates, Cabot will continue to look for ways to be more efficient, the spokeswoman said. “We continue to access our needs and determine how we can eliminate or redistribute work in order to reduce costs and increase efficiencies across the organization.”