Dow misses Q4 profit estimates, to cut 2,000 jobs

DOW is planning to cut about 2,000 jobs as part of a US$1 billion cost-saving plan, after its profits in the fourth quarter of 2022 fell short of Wall Street estimates.

The company on Thursday (Jan 26) posted an operating income of US$0.46 per share, missing analysts’ average estimate of US$0.58 per share, according to Refinitiv data.

Dow said it would shut down certain operations, “particularly in Europe”, in response to a slowing economy, as well as higher energy costs in the continent. Gas and electricity prices surged in Europe following Russia’s invasion of Ukraine. Prices of US natural gas, a key input in manufacturing chemicals, averaged US$6.10 per million metric British thermal units in the fourth quarter of 2022, up nearly 26 per cent year on year.

Supply chain disruptions in other sectors also affected demand for Dow, which sells chemicals to industries ranging from cars and food packaging to electronics.

The maker of plastics, chemicals and agricultural products said that it was reducing its purchases of raw materials, and also seeking to cut logistics and utilities costs. It added that, related to the measures, it would take a charge of between US$550 million and US$725 million in the first quarter of 2023.

Dow’s moves add to a growing wave of corporate job cuts, one that started with technology companies and has since spread to other sectors. Software maker SAP said on Thursday that it was also planning to cut about 3,000 jobs this year.

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With its headquarters in Horgen, Switzerland, Dow has 37 manufacturing sites across 15 countries in Europe, the Middle East and Africa, according to its website. As at the end of 2021, the company said it had about 35,700 full-time employees.

Dow shares fell 7.3 per cent in premarket US trading. BLOOMBERG, REUTERS