Dow is cutting 4,500 employees as part of a cost-saving program that will lean on AI to increase productivity and bolster shareholder returns.
The Wall Street Journal reports that the chemical giant announced significant workforce reductions as part of a comprehensive restructuring initiative focused on automation and artificial intelligence. The cuts will result in one-time charges ranging from $1.1 billion to $1.5 billion, the company disclosed Thursday. The announcement came alongside quarterly earnings results that showed the company’s loss widened due to lower revenue and higher costs.
The workforce reduction at Dow represents the latest in a wave of job cuts sweeping across major U.S. corporations. Amazon announced Wednesday it would lay off an additional 16,000 corporate employees after previously cutting 14,000 workers in the fall. UPS revealed Tuesday it expects to slash 30,000 jobs this year, coming on top of 48,000 job cuts last year. This trend reflects a broader corporate shift as companies increasingly allocate resources toward artificial intelligence technology rather than traditional labor costs.
Dow is launching a program called “Transform to Outperform,” which will deploy AI and automation to reduce expenditure while driving growth and productivity improvements. The initiative is projected to generate an additional $2 billion in operating earnings before interest, depreciation and amortization.
Chairman and CEO Jim Fitterling said the program “represents a comprehensive and radical simplification of our operating model.” The company currently maintains a workforce of approximately 34,600 people across operations in 29 countries worldwide.
The company released its quarterly financial results Thursday, posting a loss of $1.48 billion, or $2.15 per share, significantly wider than the $35 million loss, or 8 cents per share, recorded in the same period a year earlier. On an adjusted basis, excluding certain one-off items, Dow reported a loss of 34 cents per share. This compared favorably to the mean analyst estimate, which had projected a loss of 50 cents per share.
Sales declined 9.1 percent to $9.46 billion, meeting the average analyst forecast according to FactSet data. The cost of sales decreased 5.9 percent to $8.91 billion during the quarter. Volume decreased 2 percent year over year, with the decline led by decreases in packaging and specialty plastics segments.
The company cited the idling of a cracker facility that supplies Europe, the Middle East, Africa and India earlier in the year as a significant factor weighing on activity levels. This operational decision had a material impact on the packaging and specialty plastics business unit performance.
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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