MW Dow to cut 1,500 jobs as it struggles to get back to profitability

By Ciara Linnane

Earnings fall short of estimates on weak demand for packaging and specialty plastics

Dow Inc.'s stock rose 2% early Thursday, after the material-sciences company said it's cutting 1,500 jobs as part of a cost-reduction program aiming to save $1 billion in savings.

The company, which employs about 36,000 people around the world, is targeting $500 million to $700 million in direct cost cuts, mostly from purchased services and third-party contract labor.

"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," Jim Fitterling, Dow chair and chief executive, said in prepared remarks.

Dow $(DOW)$ is expecting to book charges of $250 million to $325 million in the first quarter to cover the costs of the program.

The cuts came as the company reported fourth-quarter earnings showing a net loss of $435 million, or 8 cents a share, including restructuring and efficiency cost measures. That was narrower than the loss of $95 million, or 15 cents a share, posted in the year-earlier period.

Excluding one-time items, the company's per-share earnings were breakeven, while the FactSet consensus was for EPS of 24 cents.

Sales fell to $10.4 billion from $10.6 billion, below the $10.5 billion FactSet consensus.

Sales were weighed down by declines in packaging and specialty plastics. Sales were down 4% from the third quarter, led by seasonal declines in performance materials and coating.

Volume increased 1% with gains across most regions, an achievement highlighted by Fitterling as it came despite "persistently weak macroeconomic conditions."

"We remain confident that Dow will benefit from the completion of our near-term incremental growth projects and an enhanced focus on operational discipline in 2025," he said.

The company is also optimistic that it will see demand growth in certain end markets, such as packaging, energy and electronics, he added.

The stock has fallen 25% in the last 12 months, while the S&P 500 SPX has gained 22.6%.

-Ciara Linnane

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January 30, 2025 06:52 ET (11:52 GMT)

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