Jim Fitterling, the CEO of Dow Inc said the company plans to cut costs further including by laying off its global workforces as it sees the demand and margin recovery in the chemical industry will probably take a couple of years before regaining the levels seen before the coronavirus pandemic. These moves follow the company’s uninspiring results in the second quarter of 2020.
Dow reported a net loss of $217 million during the quarter, compared to a profit of $90 million in the same quarter last year. EBIT drastically fell from $1.06 billion to $57 million over the same period, with its Industrial Intermediates & Infrastructure registering an EBIT loss of $220 million from $154 million earnings a year earlier.
Profits from Dow’s Packaging & Specialty Plastics division fell to $318 million in Q2 2020, down from $768 million in Q2 2019. Meanwhile, Dow’s group sales slumped 24% year-on-year to $8.35 billion, dragged by a 14% drop in selling prices and a 9% decrease in sales volumes.
Fitterling noted that the additional cost-saving measures would bring Dow’s opex cut for 2020 from $350 million to $500 million. He also noted that Dow would not raise capex unless volume and margin reached their pre-pandemic levels. The company said it would cut 6% of its global jobs. Dow operates 109 manufacturing sites which employ 36,500 staff in 31 countries. This means that the layoff will affect about 2,200 of them.
