Dow Chemical to Cut 2,500 Jobs in Aftermath of Corning Dealby and
Cost savings from Dow Corning takeover raised by $100 million
About 4.2 percent of Dow’s total workforce to be eliminated
Dow Chemical Co. plans to eliminate about 2,500 jobs and shut plants in North Carolina and Japan as it slims down after taking full control of its Dow Corning Corp. silicone venture.
The company will take a charge of about $410 million to $460 million in the second quarter for asset impairments, employee severance and other costs related to the revamp, Dow said in a statement Tuesday. The company raised its goal for cost savings from the deal by $100 million to $400 million while maintaining its $1 billion target for earnings growth.
Dow paid $4.8 billion to buy Corning Inc.’s 50 percent stake in the 72-year-old joint venture in a deal completed at the beginning of this month.
Dow Chemical Chief Executive Officer Andrew Liveris has shed commodity assets such as chlorine while adding higher value products such as silicone used in tires and electronics. The job cuts represent about 4.2 percent of Dow’s workforce of 59,500, which includes 10,000 Dow Corning employees.
“We are moving quickly and effectively to integrate Dow Corning and deliver the synergies that will drive new levels of value creation,” Liveris said in the statement.
The company announced the Corning deal in December at the same time it unveiled an agreement to merge with DuPont Co., a $56.4 billion combination that’s under antitrust scrutiny. DuPont plans to eliminate 10 percent of its 63,000 employees by late this year when the merger, the largest ever in the chemical industry, is expected to close.
Dow will shut silicone factories in Greensboro, North Carolina, and Yamakita, Japan, as well as some offices and production lines in other unspecified locations, according to Tuesday’s statement. The cost reductions plus about $100 million of revenue growth from the deal will add $1 billion a year to earnings before interest, taxes, depreciation and amortization, Dow said, repeating prior targets.
The deal gave Corning and Dow each a 40.25 percent stake in Hemlock Semiconductor Group, a maker of polycrystalline silicon used in computer chips that was formerly controlled by Dow Corning. Shin-Etsu Handotai Co. Ltd. owns the rest.
Dow separately is eliminating another 2,200 positions. Liveris last year announced he would cut as many as 1,750 jobs after selling the chlorine unit, and the company slated more reductions in February.