Dow Inc.'s fourth-quarter profits came in well below Wall Street expectations and the material sciences company said Thursday that it is slashing 1,500 jobs globally in an effort to cut costs as sales stagnate.
The layoffs amount to about 4% of Dow's workforce, according to data firm FactSet. Dow said the staff reductions are part of a broader plan to cut $1 billion in costs, citing “persistently weak macroeconomic conditions.”
Shares of Midland, Michigan-based Dow tumbled nearly 8% in morning trading.
Dow posted a loss of $35 million in the fourth quarter. Adjusted for one-time expenses, per-share profits in the period were zero. That's down from last year's earnings of 43 cents per share and well short of the 24 cents-per-share profit that analysts were expecting. For the full year, Dow recorded profits of $1.71 per share, down from 2023's $2.24.
Sales in the quarter and year also fell from a year ago, dragged down by its packaging and specialty plastics business, which accounts for more than half of the company's revenue. Dow said that sales in its largest segment fell 6% in the fourth quarter and for the full year.
Total sales for the quarter fell close to 2%, while full year 2024 sales fell 3.6% to $43 billion, down from $44.6 billion in 2023.
Regarding the restructuring, Dow expects to post charges in the first quarter totaling $250 million to $325 million for severance and other related costs
“While these decisions are difficult, we must continue to take proactive actions to reduce costs while we navigate through this ongoing slower-than-expected macroeconomic recovery,” said Dow CEO Jim Fitterling.
Almost two years ago to the day, Dow announced that it was cutting 2,000 jobs — 5% of its workforce — in an effort to reach $1 billion in savings.