Dow Inc. has reported its fourth-quarter earnings, which fell significantly short of analysts’ projections. In light of persistent challenges in the market, the materials science firm announced on Thursday plans to eliminate 1,500 positions globally, a move intended to reduce expenses amid stagnant sales.
This reduction in workforce represents roughly 4% of Dow’s total employees, as indicated by data company FactSet. The company is embarking on a larger initiative aimed at cutting expenses by $1 billion, attributing these measures to “persistently weak macroeconomic conditions.” As a result of this news, shares of the Midland, Michigan-based company saw a nearly 8% decrease during morning trading hours.
For the fourth quarter, Dow experienced a loss of $35 million. Adjusted figures, excluding one-off items, showed that profits for the period were negligible. This performance marks a decline from last year’s earnings of 43 cents per share, falling well below the expected profit of 24 cents per share from analysts. In a broader context, Dow’s full-year earnings were recorded at $1.71 per share, a decrease from $2.24 in 2023.
Sales figures also reflected a downturn both for the quarter and the full year, primarily impacted by struggles in its packaging and specialty plastics division, which contributes to over half of the company’s revenue stream. This segment saw sales decline by 6% during the fourth quarter and throughout the year.
In total, sales for the quarter slipped by nearly 2%, while 2024’s annual sales decreased by 3.6%, totaling $43 billion compared to $44.6 billion in 2023. Regarding the anticipated restructuring, Dow foresees charges ranging from $250 million to $325 million in the first quarter, covering severance and associated expenses.
CEO Jim Fitterling acknowledged that these decisions are challenging but necessary. He stated, “We must continue to take proactive actions to reduce costs while we navigate through this ongoing slower-than-expected macroeconomic recovery.” Almost two years prior, Dow revealed plans to cut 2,000 jobs, equivalent to 5% of its workforce, in pursuit of achieving $1 billion in savings.
