Dow Chemical To Cut 4,500 Jobs

Dow Chemical Co. plans to cut 4,500 jobs, or 8% of its work force, doubling its earlier job reduction estimate as it looks to bolster savings from its purchase of Union Carbide.

Dow Chemical said today it plans to cuts annual costs by $1.1 billion by early 2003, more than twice its $500 million projection when the takeover of Union Carbide was announced in 1999.

The Midland-based company had previously said it was cutting 4% of its work force due to cost savings found through the acquisition, including the reduction of overlapping responsibilities. The $7.3 billion deal was completed Feb. 6.

“Achieving these synergies will be critical to ensure that this merger creates long-term value for all our stakeholders,” Michael D. Parker, Dow Chemical’s president and chief executive, said in a statement. “As we accelerate our aggressive pursuit of both cost and growth synergies, we will create greater value than either Dow or Union Carbide could have realized separately.”

Dow Chemical is one of the world’s leading producers of plastics and the nation’s second largest chemical company behind DuPont. Last Thursday, Dow Chemical said it lost $685 million in the first quarter, including a special merger-related charge of $1.4 billion.

Excluding the charge, the company said it earned 26 cents per share or $502 million for the quarter, compared with restated earnings of $902 million for the same quarter of last year. Sales rose to $7.4 billion for the first quarter, compared with $7.3 in the year-ago period.