Dow to cut 1,500 jobs as economic woes persist

Responding to what it calls “ongoing microeconomic uncertainty,” Dow is launching a $1 billion cost-cutting program that will include eliminating 1,500 jobs, or about 4% of its workforce. The company also plans to reduce its annual capital spending, now about $3.5 billion, by $300 million–$500 million.

The actions “are focused on reinforcing our long-term competitiveness as we continue to navigate this prolonged economic downturn,” Dow CEO Jim Fitterling said on a Jan. 30 call with stock analysts to discuss financial results.

Profits at Dow, the largest US chemical maker, fell 24.4% last year from 2023. Sales tumbled 3.7%. The firm managed to increase sales volumes, but prices have been weak. Fourth-quarter prices declined an average of 3% from the prior year quarter.

The cost-cutting follows a review Dow unveiled in October that’s focused on its European business in polyurethane raw materials. The company is considering, among other options, selling some of those assets. Fitterling said he will provide an update on the review by midyear. “I don’t want to be doom and gloom about Europe, but I think we have to be realistic that downstream demand is not coming back,” he said.

The cost-cutting program will focus on Europe and Asia, where Dow faces the most economic pressure, Fitterling noted. It doesn’t target facility shutdown, which is why the charge associated with the program is “relatively light,” he said.

LyondellBasell Industries, another big chemical company, posted a 25.0% drop in 2024 earnings on a 2.0% decline in sales.

Like other petrochemical makers, Lyondell has been affected by oversupply. Industry’s fourth-quarter profits were about 60% of historical averages, CEO Peter Vanacker said in a call with analysts. “There is no getting around it, 2024 was another challenging year for petrochemicals,” he said.

Lyondell intends to run its North American and European polyolefin plants at the relatively low operating rates of 80% and 75%, respectively, during this quarter. But the company does see signs of improvement. For example, after 2 years of declines, North American polyolefin demand rebounded in 2024.

BASF, the world’s largest chemical producer, disclosed preliminary results for 2024. Sales declined by 5.2% as lower prices more than offset volume gains, while earnings before taxes dropped by 9.1%. The German firm says earnings were stronger across its core businesses, but it took charges related to its battery materials business and restructuring costs.

Lanxess, another big German chemical maker, expects to report an increase in earnings before taxes of 20% for 2024 and notes a stronger-than-expected December. “The underlying macroeconomic environment going into 2025 has however not improved,” the company says in a statement.