Responding to weak product demand and falling revenues, the country's largest chemical manufacturer said late Tuesday it will lay off thousands of workers and close a number of plants worldwide to cut costs, though it's not yet known if its New Jersey employees and operations will be affected.
In its latest filings with the U.S. Securities and Exchange Commission, Michigan-based Dow Chemical Co. said it will cut approximately 3,000 jobs and shut about 20 manufacturing facilities by the end of 2014, which it estimates will result in nearly $500 million in annual cost savings. Paired with slashed capital spending and other cost-cutting measures, Dow expects to save about $2.5 billion within two years.
A company spokesman would not disclose whether Dow's New Jersey plants will be included in the restructuring effort.
The restructuring announcement flanked Dow's third-quarter earnings report, which revealed company-wide profits fell nearly 40 percent from the third quarter of 2011 and revenues dropped 10 percent in the same period.
"We recognize that these difficult conditions may have extended staying power, as the new reality is that we are operating in a slow-growth and volatile world. This requires an agile and efficient response," said Andrew N. Liveris, Dow chairman and CEO, in a statement. "While these actions are difficult, they demonstrate our resolve to tightly manage operations — particularly in Europe — and mitigate the impact of current market dynamics."
In an Oct. 23 SEC filing, Dow pinpointed 11 plants — located in Belgium, Switzerland, the Netherlands, Spain, Japan, Korea, the United Kingdom, Massachusetts, Texas, Ohio and Michigan — where it plans to close or consolidate operations and lay off workers. But the chemical giant said it will also shut down a number of unspecified small manufacturing facilities.
Dow's Pennsauken manufacturing site has been in operation for more than 30 years and currently employs about 25 people, according to the company's website. The chemical maker also owns a manufacturing and R&D plant with 50 employees in Piscataway through its Union Carbide Corp. subsidiary, a Dow spokesman said.
In 2011, Dow employed about 52,000 people at 197 sites in 36 countries. The company said the job cuts amount to 5 percent of its total workforce.
Dow said it will continue to invest in areas with high profit potential, including its agrosciences and electronic materials segments, despite its extensive cuts in jobs and capital projects.