Chemical major Dow Inc. (DOW) announced Thursday various restructuring acions, including workforce reduction of around 2,000 roles, as part of its stated plan to achieve $1 billion in cost savings in 2023.
The company plans to record a charge of $550 million to $725 million in the first quarter for costs associated with these activities, which primarily include severance and related benefit costs.
Over the longer-term, Dow remains on track to grow its underlying EBITDA by greater than $3 billion by 2030 while reducing its carbon emissions by 30 percent versus its 2005 baseline as it progresses on its path to carbon neutrality by 2050.
The company expects these proactive actions to optimize its cost structure in response to near-term macroeconomic uncertainty, while maintaining long-term competitiveness across the economic cycle.
The company also said it continues its Decarbonize and Grow strategy as well as its disciplined and balanced approach to capital allocation.
Dow expects to realize the projected cost savings in 2023 through structural improvements of $500 million, maintaining a low cost-to-serve operating model, and optimizing labor and services costs, including a global workforce reduction of around 2,000 roles.
Further the company expects to shut down select assets. The company will further evaluate global asset base, particularly in Europe, to ensure long-term competitiveness and enhance cost efficiency.
Dow also plans to reducing purchased raw materials, logistics and utilities costs.
Separately, the company announcing its weak fourth-quarter earnings and sales.
Jim Fitterling, chairman and chief executive officer, said, "As we enter 2023, we remain focused on managing near-term dynamics... While we see initial positive signs from moderating inflation in the U.S., improving outlook for energy in Europe, and re-opening in China, we continue to be prudent and proactive by implementing a playbook of targeted actions focused on optimizing labor and purchased service costs, reducing turnaround spending, and enhancing productivity."
For comments and feedback contact: editorial@rttnews.com
Business News