NEW YORK — PPG Industries has announced plans to reduce its workforce by approximately 1,800 employees as part of a cost-cutting strategy. The company, which specializes in paints and coatings, also revealed that it has reached an agreement to sell a significant portion of its architectural business.
On Thursday, the Pittsburgh-based company stated that the layoffs will predominantly affect positions in the United States and Europe. While specific timing for the job cuts was not provided, PPG indicated that these reductions are part of a broader, multi-year initiative designed to streamline operations globally. This initiative will also involve “various facility closures,” although further details on these closures were not shared.
Tim Knavish, the chairman and CEO of PPG, remarked that these difficult decisions are crucial for adjusting the company’s fixed cost structure and for aligning the company’s size with its needs. He also pointed to two recent business divestitures that are part of this restructuring effort.
In conjunction with the layoff announcement, PPG disclosed that it has signed a deal to sell its entire architectural coatings division in the U.S. and Canada, which includes well-known brands such as Liquid Nails, Glidden, and Olympic. This division generated about $2 billion in net sales for PPG last year and is being sold to private equity firm American Industrial Partners for $550 million. The sale is anticipated to finalize by late 2024 or early 2025.
Furthermore, back in August, PPG also agreed to sell its silicas products business to the Poland-based company QEMETICA S.A. for around $310 million. That deal is still pending completion.
The announcements regarding layoffs and business sales come on the heels of an underwhelming earnings report from PPG. In the third quarter, the company reported a net income of $468 million, or $2.13 per share, on revenues totaling $4.58 billion, which fell below Wall Street forecasts.
PPG’s job cuts come at a time when the housing market is experiencing a downturn. Existing home sales in the U.S. decreased by 2.5% in August, with prices continuing to rise annually for the 14th month in a row. Additionally, the average interest rate on a 30-year mortgage rose to 6.32% last week, although this figure is still below the May peak of 7.22% for 2024.
Both PPG and American Industrial Partners expressed optimism regarding the recent agreement. Rick Hoffman, a partner at AIP, stated that the firm is “thrilled” to be acquiring a business with a distinguished history spanning 125 years. Tim Knavish commented that these divestitures would help “further optimize” PPG’s portfolio, promoting growth in the company’s strongest sectors.