Goodyear to cut 500 jobs amid ‘significantly weaker’ demand

GOODYEAR Tire & Rubber will eliminate about 500 jobs, adding to the wave of layoffs sweeping corporate America as the company cuts costs in response to weak demand and rising inflation.

The reductions will target salaried employees, representing about 5 per cent of such positions across the company, according to a statement on Friday (Jan 27). The move, expected to be completed during the first half of this year, will results in pretax charges of about US$55 million.

“Our fourth-quarter results fell short of our expectations given a significantly weaker industry backdrop, particularly in Europe,” chief executive officer Richard Kramer said in the statement. Tyre demand fell about 12 per cent during the period in the Europe, Middle East and Africa region, which will drag that unit to an operating loss of about US$80 million.

Goodyear shares fell 6.3 per cent at 9.32 am in New York, the biggest intraday decline in almost three months. The company is slated to report full results for the fourth quarter on Feb 8.

The company said it’s grappling with inflation in areas such as wages and benefits, countering the benefit from a decline in raw material costs. BLOOMBERG