Dow missed fourth-quarter profit estimates on Thursday, and said it will lay off 1,500 employees as a part of its $1 billion cost savings plan, as the chemical firm grapples with lackluster demand.
Shares were down 2.9% to $39.87 in volatile premarket trade.
The chemical industry has been struggling with weak demand recovery, leading to lower prices, especially in Europe, where a challenging regulatory environment has prompted some companies to rethink their strategies.
Last year, Dow said it had begun reviewing some of its European assets, focusing on its polyurethane business.
The company also said it was reducing exposure to low-value merchant orders by shutting down its Freeport unit in 2025, which represents about 20% of North America’s industry capacity.
CNN to cut jobs by 6pc amid digital push
The Midland, Michigan-based Dow said on Thursday, that the workforce reduction is a part of the company’s plan to take additional actions to deliver $1 billion in cost cuts.
Dow will also reduce its current year expenditure by $300 million to $500 million.
Quarterly net sales from its packaging and specialty plastics segment, its largest by revenue, fell 5.8% to $5.32 billion compared to a year ago.
The company said the segment’s sales declined as lower prices offset higher demand for its packaging products.
On an adjusted basis, the company reported break-even earnings per share, compared with analysts’ average estimate of 24 cents per share, according to data compiled by LSEG.
Comments
Comments are closed for this article.