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Dow Will Eliminate Up To 1,750 Jobs

Business: Action anticipates spin-off of chlorine business to Olin

by Marc S. Reisch
May 6, 2015 | A version of this story appeared in Volume 93, Issue 19

Credit: Dow
Dow’s headquarters site in Midland, Mich., shown here, will likely be affected by the layoffs.
Dow Chemical’s headquarters in Midland, Mich.
Credit: Dow
Dow’s headquarters site in Midland, Mich., shown here, will likely be affected by the layoffs.

Dow Chemical plans to cut up to 1,750 jobs over the next two years. The company says the action is a streamlining that follows the $5 billion spin-off of chlorine assets to Olin, which is expected to be completed by the end of this year.

In addition to the layoffs, which represent 3% of the firm’s global workforce, the firm says it will close select manufacturing facilities and make minor consolidations at others. Separately, some 2,000 Dow employees will be joining Olin.

Altogether, the actions will lead to a charge against earnings of up to $380 million that Dow plans to take in the second quarter of 2015. The employment and asset adjustments will lead to annual cost savings of $300 million, Dow says.

Howard I. Ungerleider, Dow’s chief financial officer, explains that the changes are part of a three-year, $1 billion productivity drive to enable higher earnings. Dow outlined those changes in a meeting with investors last fall.

“Today’s announcement illustrates our ongoing commitment to the consistent implementation of our strategy moving forward and proactively addresses any stranded costs from the divestment of Dow chlorine products,” Ungerleider says.

That strategy moves the firm away from a reliance on cyclical commodity chemicals toward higher-value-added specialties. The deal with Olin and the recent sales of the Angus Chemical and sodium borohydride businesses took place under pressure from Third Point, an activist investment firm.

Third Point had criticized Dow for performing poorly and pursuing a strategy based on integrating commodity and specialty chemicals. Late last year, two Third Point executives joined Dow’s board.


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