Dow Chemical Downsizing workforce by 5,000 and close 20 units

by Amitjha | December 8, 2008 at 08:52 pm

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The HR managers are finding it tough to retain their Human face, they are on firing spree, and they are doing it blindly to save some bucks of dying companies.The Dow Chemicals have planned to downsize thier workforce by 5000 in first round.But the share of Dow rose by 7% on this announcement.

The market sentiments never cares about the social resposibility, the firing news makes the share bullish............strange isn't it?

Dow Chemical Co said on Monday it will close 20 facilities, divest several businesses and cut 5,000 jobs, making it the latest large chemical company to throttle back operations due to the global economic slump.

In addition to cutting 5,000 full-time jobs, or 11 percent of its workforce, the company also plans to reduce the number of outside contractors it employs by 6,000, or about 30 percent, and temporarily idle about 180 plants. Dow's shares rose over 7 percent in afternoon trade following the announcement.

Dow said its action, which comes less than a week after its U.S. rival DuPont Co announced cutbacks, marks an acceleration of its "transformational strategy" and should lead to annual cost savings of $700 million by 2010.

The freeze in the global credit markets and a recession in many developed economies has hurt Dow and its peers. The companies have also suffered from a sharp slowdown in many emerging regions -- areas which had been driving growth for them in recent quarters.

"We are accelerating the implementation of these measures as the current world economy has deteriorated sharply, and we must adjust ourselves to the severity of this downturn," Chairman and Chief Executive Officer Andrew Liveris said in a statement.

The Midland, Michigan, chemicals maker is also in the process of buying specialty chemicals producer Rohm & Haas Co for $15.3 billion, a move the companies expect will yield $800 million in savings by 2010.