Dow Chemical (DOW, Financial), a leading global chemical company, has announced plans to lay off 1,500 employees, representing approximately 4% of its workforce. This move is part of a broader strategy to address ongoing macroeconomic uncertainties and enhance the company's long-term competitiveness. Dow aims to save around $1 billion annually through reduced capital expenditures and workforce reductions.
The company plans to achieve cost savings by cutting spending on services and third-party contractors, estimating direct cost reductions of $500 million to $700 million annually. Jim Fitterling, Dow's Chairman and CEO, emphasized the necessity of these difficult decisions to manage costs amid a slow economic recovery. Dow will continue to evaluate its competitive strategies through 2025 and may implement further actions if needed.
Dow has allocated $250 million to $325 million in the first quarter of 2025 to cover layoff-related costs. This announcement follows a previous round of layoffs in January 2023, when Dow reduced its global workforce by about 2,000 employees, or 5%.
In conjunction with the layoff announcement, Dow reported a financial loss of $35 million in the fourth quarter of 2024, with adjusted earnings per share breaking even. Net sales decreased by approximately 2% year-over-year. For the full year 2024, global net sales were $42.964 billion, down 3.9%, and EBIT was $2.588 billion, down around 7%.
The decline in performance is attributed to challenges in the packaging and specialty plastics segment, which accounts for over half of Dow's revenue. Both volume and pricing of main products in this segment declined during the reporting period.
