US chemical company Dow to reduce workforce by 2,000

By Ovunc Kutlu

ISTANBUL (AA) – The US-based chemical company Dow announced Thursday it will reduce its global workforce by approximately 2,000 to optimize labor and services costs.

The Dow Chemical Company said in a statement that it aims to achieve $1 billion in cost savings this year through structural improvements of $500 million and maintaining a low cost-to-serve operating model.

The Michigan-based firm said it will shut down select assets, evaluate its global asset base, particularly in Europe, to ensure long-term competitiveness and achieve cost efficiency.

The company also aims to reduce operating expenses by $500 million with a focus on near-term cash flow, and it will lower purchased raw materials, logistics and utilities costs.

Dow said it will record a charge of $550 million to $725 million in the first quarter of this year for costs associated with those activities, which include severance and related benefit costs.

"We are taking these actions to further optimize our cost structure and prioritize business operations toward our most competitive, cost-advantaged and growth-oriented markets, while also navigating macro uncertainties and challenging energy markets, particularly in Europe," said Dow Chairman and CEO Jim Fitterling.

Dow saw its net sales fell 17% to $11.9 billion in the fourth quarter of 2022, from $14.3 billion the same period of previous year.

Its income plummeted more than 60% to $647 million, from over $1.7 billion, during that period.