Jan 30- Dow takes drastic measures to slash costs after a disappointing fourth-quarter earnings report. The chemical giant said it would cut 1,500 employees as part of a total cost-saving initiative of $1 billion that seeks to deal with slow markets in key areas. Dow shares dropped 2.9 percent in volatile premarket trading with the company facing investor concerns about the outlook.
In Europe, regulatory challenges that have kept Dow considering how to refocus its strategy have especially weighed down the weak demand recovery. Dow has last year signaled a review of its European assets, focusing on its polyurethane business. The company will also shut down its Freeport unit by 2025, cutting its exposure to low-margin merchant orders and taking around 20 percent off North America's industry capacity.
Its packaging and specialty plastics division, the largest in terms of revenue, saw quarterly net sales fall 5.8 percent to $5.32 billion, compared with $5.67 billion in the year-earlier quarter. Despite the demand for packaging products increasing, the overall performance was suffering from lower prices. Dow said break-even earnings per share on an adjusted basis, missing analysts' forecasts of 24 cents.
Further stabilizing the financial footing amid ongoing challenges, the company also is cutting between $300 million and $500 million in spending this year.
