Dow Inc. reported fourth-quarter profits that significantly fell short of Wall Street’s expectations, prompting the materials science company to announce on Thursday the elimination of 1,500 jobs worldwide as part of a cost-cutting initiative amid stagnant sales. This reduction represents approximately 4% of Dow’s total workforce, according to FactSet. The company indicated that these layoffs are part of a larger strategy aimed at achieving $1 billion in cost reductions, attributing the need for these measures to “persistently weak macroeconomic conditions.” Following the announcement, shares of Dow, based in Midland, Michigan, dropped nearly 8% in morning trading.
In the fourth quarter, Dow reported a loss of $35 million. When adjusted for one-time expenses, earnings per share were zero, a decline from last year’s profit of 43 cents per share and significantly below the anticipated 24 cents per share from analysts. For the entire year, Dow’s earnings were $1.71 per share, down from $2.24 in 2023. Sales for both the quarter and the year also decreased compared to the previous year, primarily due to challenges in its packaging and specialty plastics division, which constitutes over half of the company’s revenue. Dow noted a 6% decline in sales within its largest segment for both the fourth quarter and the full year. Overall sales for the quarter decreased nearly 2%, while total sales for 2024 fell 3.6% to $43 billion, down from $44.6 billion in 2023.
As part of the restructuring, Dow anticipates incurring charges between $250 million and $325 million in the first quarter for severance and related costs. “While these decisions are difficult, we must continue to take proactive actions to reduce costs while we navigate through this ongoing slower-than-expected macroeconomic recovery,” stated Dow CEO Jim Fitterling. Nearly two years ago, Dow had announced a reduction of 2,000 jobs—5% of its workforce—in a similar effort to achieve $1 billion in savings.
