Dow is launching a workforce reduction—2,000 workers, over 5% of its total workforce—as the company continues to grapple with economic turbulence, primarily in Europe.Dow is the first major chemical company out of the gate with full-year 2022 financial results. Dow managed a 3.5% sales increase, but earnings declined by a sharp 32.5%.On a Jan. 26 call with analysts, Dow CEO Jim Fitterling said the year began well, with strong demand across the company’s businesses. The picture changed in the second half. “Economic conditions deteriorated, driven by record inflation, rising interest rates, ongoing pandemic lockdowns in China, and continued geopolitical tensions,” he said.Europe, where Russia’s invasion of Ukraine has driven up energy prices and caused many chemical producers to shut plants, was responsible for 60% of Dow’s earnings decline.The layoffs are part of a Dow program, originally unveiled when Dow released third-quarter earnings in October, to save $1 billion in 2023. Half the savings will come from structural improvements, including the job cuts. Dow will also shut plants, particularly in Europe. It says it will announce the locations set for closure later this quarter. The company says that for now the program will focus on smaller facilities.
That's a pretty frightful decline in earnings! Best wishes to those affected, and best wishes to all of us.