After posting a quarterly loss, chemicals maker Dow Inc. (DOW) said it will cut 6% of its workforce.
Dow has about 36,500 workers in 31 countries – as a result, the workforce reduction will affect about 2,200 employees.
The company recorded a net operating loss, excluding certain items, of $189 million, or $0.26 per share, for the second quarter, versus an operating profit of $649 million, or $0.86 per share in the year-ago period. Meanwhile, net sales dropped by 24% to $8.35 billion from almost $11 billion.
Dow attributed the quarterly loss to a plunge in demand for its chemicals from consumer durables and construction material makers.
Dow also said it will expand its operating expense reduction program to $500 million from $350 million through more cost cutting in 2020.
“While these are difficult decisions, they are necessary to maintain competitiveness while the economic recovery gains traction,” said CEO Jim Fitterling.
However, Fitterling sees some signs for optimism.
“Based on what we’ve seen in the second quarter and into July, we continue to expect a gradual and uneven recovery,” he said.
Indeed, sales volume in the Asia-Pacific region rose 3% year-over-year in the second quarter and by 13% sequentially.
“Extended economic lockdowns shifted the inflection point for demand recovery in key markets and geographies into June, where we began to see gradual improvements across most industries,” Fitterling said. “The growing recovery in China and early signs of improvement in western Europe are positive indicators for the U.S. and Latin America.”