Web Date: July 6, 2009
BASF To Cut 3,700 Jobs
BASF plans to cut as many as 3,700 jobs by 2013 as it moves to integrate Ciba, the Swiss specialty chemicals company it acquired in April for more than $5 billion. At the end of 2008, Ciba had about 12,500 employees and BASF had 97,000.
Along with the job cuts, Germany's BASF says it will take action on 23 of 55 former Ciba production sites. It will decide by March 2010 whether to restructure, sell, or close them. The firm does plan to integrate the 32 remaining Ciba production sites into its global network. In addition, BASF says it will consolidate 36 of 70 Ciba sales offices and research sites with existing BASF facilities.
The German firm projects that costs to integrate Ciba will come to nearly $210 million by the end of this year and $765 million by 2012. But BASF expects the consolidation to result in annual savings of about $420 million by the end of 2010, increasing to more than $550 million annually by 2012.
"This is unfortunately not good news for some of our employees," says BASF Chairman Jürgen Hambrecht. "But the combined businesses can be successful in the long term only if we optimize them and exploit the full potential for synergies."
The firm says it has begun talks with union representatives about the job reductions. "I promise all our employees that we will keep the period of uncertainty as short as possible and will make decisions in a fair and transparent way," Hambrecht says.
This is not the first round of job cuts advanced at BASF this year. In late April, Hambrecht said BASF would eliminate at least 2,000 positions in 2009 via plant closures and sales. At the time, the firm reported that first quarter 2009 earnings fell 64% to $573 million compared with the year-ago quarter. He also said he saw no signs of an economic turnaround.
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