Dow Chemical to Cut 11% of Staff

By BOB SECHLER

Dow Chemical Co. said Monday it will cut about 5,000 full-time jobs, or 11% of its work force, close 20 facilities and sell some businesses as the company looks to speed its restructuring and reduce costs.

Chief Executive Andrew N. Liveris couched the bulk of the moves as part of an existing strategy, although he said the actions are being accelerated "given the deterioration in the world economy and most of our markets."

The largest U.S. chemical producer by revenue also said it will temporarily shut about 180 plants, or 30% of its capacity. Dow is cutting 6,000 contractor jobs as well, which equates to about 30% of its contractors.

The company said it will take an estimated $700 million pretax charge in the fourth quarter as a result of the moves, reducing per-share earnings by between 50 cents and 60 cents. Wall Street analysts were expecting Dow to earn 42 cents a share in the fourth quarter.

The company joins a list of major manufacturers and industrial companies that have announced big job cuts recently amid slumping demand.

Last week, 3M Co. announced it is cutting 1,800 jobs, or about 2.4% of its work force, while DuPont Co. said it will cut 2,500 jobs, or about 4% of its staff.

Under Dow's plan, the restructured company will comprise three operating models: a joint ventures and asset-light business, a performance-products unit, and a unit for health and agriculture, advanced materials and other products. Dow said it would provide specific details on the businesses early next year.

Mr. Liveris stressed on a conference call with analysts Monday that he is committed to maintaining the company's stock dividend.

Dow's latest moves follow on its announcement in October that it would cut capital spending by $100 million and discretionary spending by $100 million to $150 million by year-end to deal with the challenging economy.

The Midland, Mich., company is in the process of closing its acquisition of specialty-chemicals maker Rohm & Haas Co., a move Dow expects will widen its margins and make its earnings steadier. Dow's annual profits have been falling steadily after a big jump in 2005.

Mr. Liveris reiterated Monday that he expects the Rohm & Haas deal to close as planned, although he indicated the company is looking at the financial parameters of it in light of the poor economy and declining markets.

Dow also recently agreed on a joint venture with Kuwait Petroleum Corp. that will make numerous base chemicals that have lower margins and have become less of a focus for chemical makers as they pursue higher-margin products. Dow will be receiving $500 million less than what was first agreed to when the effort was unveiled a year ago.

—Kerry E. Grace contributed to this article.