SPECIALTY CHEMICAL compan ies in the U.S. and Europe announced job cuts last week in response to a downturn in key markets such as construction and auto manufacturing. The moves, which follow the lead of Dow Chemical and DuPont, are aimed at reducing costs. They are accompanied at some firms by plant shutdowns and other cost-cutting measures.
Air Products & Chemicals will impose a 7% staff reduction that eliminates approximately 1,300 jobs through the first half of next year. When combined with a reduction in plant operation costs and a refocusing of business development spending, the move targets annual savings of $110 million beginning in 2010.
DSM says it will eliminate 1,000 positions, or about 5% of its workforce, by 2010 as part of a plan to deliver annual cost savings of $140 million. Temporary plant shutdowns have already been implemented in business groups such as fiber intermediates, engineering plastics, resins, and basic chemicals.
Chemtura announced it will cut about 20% of its professional and administrative staff, or about 500 jobs, over the next month. Citing sales volume decreases in electronics, construction, and general industrial markets, the company says it aims to reduce fixed costs by approximately $50 million.
Momentive says it will eliminate 250 positions for a 9% reduction in its workforce. Eastman announced a reduction of 40 management positions in the fourth quarter, along with a raft of changes, including a reduction in overtime and vacation carry-over. Eastman aims to reduce costs in 2009 by more than $100 million, 80% of which will come from labor-related cuts. Arkema announced temporary shutdowns or production cutbacks at 40% of its plants worldwide.
CEOs say the reductions are necessary to position their firms for a tough year ahead. "Although our life sciences businesses are continuing to perform well, most of our materials sciences businesses have increasingly been affected by the downturn," DSM Chairman Feike Sijbesma says.