NEW YORK – Dow Chemical Co. said Monday it will slash 5,000 full-time jobs — about 11 percent of its total work force — close 20 plants and sell several businesses to reign in costs amid the economic recession.
The company, one of the largest chemical makers in the world, expects the moves to save about $700 million per year by 2010. Dow also will temporarily idle 180 plants and prune 6,000 contractors from its payroll.
"We are accelerating the implementation of these measures as the current world economy has deteriorated sharply, and we must adjust ourselves to the severity of this downturn," Chief Executive and Chairman Andrew N. Liveris said in a statement.
The Midland, Mich.-based company expects "the new Dow" to be comprised of three units: joint ventures; performance products; and health and agriculture, advanced materials and other market-facing businesses.
The reorganization comes just days after the company closed on its K-Dow Petrochemicals joint venture with a company controlled by the Kuwait government.
Dow is slated to close on its $15.3 billion buyout of Rohm & Haas Co. early next year, a deal it hopes will help it grow into the high-margin specialty chemicals market. The company expects that deal to results in about $800 million in savings over time.
Last week Dow rival DuPont said it would cut 2,500 jobs and warned it won't turn a profit in the fourth quarter due to a slowdown in the automotive and construction markets.
Shares of Dow Chemical jumped 75 cents, or 4 percent, to $19.75 in premarket trading, having closed Friday at $19. The stock is still worth less than half of its 52-week high of $45.50, set nearly a year ago.