The chemical giant Dow Chemical Co (NYSE:DOW) has decided to slash off 1,750 jobs as part of its cost-cutting initiative. As per the reports, it announced on Monday that it would cut 1,500-1,750 jobs as part of its restructuring procedure. The primary objective of cutting down 3% workforce globally is nothing but to bring down the cost by $300 million per year.
What’s Next:
The company has announced that it would incur charges worth $330 million to $380 million during 2Q2015 as part of this restructuring procedure. The senior management seems strict about this move and looks forward to continuing it in the future as well. While talking to reporters, Howard Ungerleider, Chief Financial Officer, Dow Chemical stated that the company would continue making productive efforts by keeping cost cutting in the focus. Dow Chemical looks forward to making the best use of the available resources to enhance the productivity and profitability in the future.
Dow Chemical’s stock elevated 0.6% in the light trade in the premarket trading. If taken into consideration the progress of Dow Chemical’s share in this year, one can see that it has climbed heavily. So far, it has increased as much as 13% year to date as compared to S&P 500 index that has increased just 2.4%. The global chemical industry has been going through a transition phase for last some time. It has forced a lot of small players to close down their operations or diversify resources into other business lines.
Some of the largest players in Oil and Gas industry in United States have already backed out stating that running the operations was becoming very difficult amidst of low demand, huge competition, and difficult market conditions. The step taken by Dow Chemical Co (NYSE:DOW) is not unexpected in the prevailing market conditions. It will be great to see how the company survives this phase and advances towards high revenues and profit figures.
