Following the completion of its acquisition of Corning’s half of the Dow Corning silicones joint venture earlier this month, Dow Chemical has unveiled plans to lay off 2,500 employees, about 4% of its workforce.
The job cuts are the first major layoffs to be revealed by Dow since December when it announced both the purchase of Dow Corning and plans to merge with DuPont. DuPont announced the elimination of 10% of its staff at the time.
About 700 of Dow’s job cuts will occur in the Midland, Mich., area where Dow and Dow Corning have headquarters. Dow says it implemented a hiring slowdown in January, which led to job openings that it will preferentially fill with Dow and Dow Corning employees “to minimize the impact of job loss.”
Dow is closing Dow Corning plants in Greensboro, N.C., and Yamakita, Japan. Dow says it will consolidate offices globally, though Midland-area offices of both firms will remain open.
In addition, Dow is upping the synergy target for the acquisition from the $400 million it announced in December to $500 million—$400 million from cost cutting and $100 million in additional growth resulting from the transaction.
Dow will take a charge of up to $460 million for severance packages and asset impairments. It expects to complete the cost-cutting program within two years.
“With these difficult but necessary actions, we are bringing together the best of each company’s talent and technology, accelerating Dow’s strategy to go narrower and deeper into attractive targeted market sectors, and setting the stage for the new Dow,” says CEO Andrew N. Liveris.