#United States #Midland #Cost Savings #Dow Inc. #macroeconomic strategy

Dow Inc. Confirms Actions for Significant Cost Reductions

In a bold move to bolster its financial position amid ongoing economic challenges, Dow Inc. (NYSE: DOW) has announced a strategy to achieve $1 billion in cost savings. The Midland, Michigan-based materials science leader is implementing targeted measures designed to enhance efficiency and support its long-term growth objectives. This proactive approach is a response to the uncertainties present in the current macroeconomic environment.

A Breakdown of the Cost-Saving Strategy

The significant reduction of costs is primarily focused on several key areas:

• - Direct Cost Reduction: Dow aims to cut between $500 million to $700 million in direct costs. This will largely stem from decreasing expenditures on purchased services and third-party contract labor, enabling the company to streamline operations.
• - Workforce Adjustments: A crucial component of the strategy includes a workforce reduction, estimated to affect about 1,500 positions globally. While these decisions are challenging, they are deemed necessary for aligning labor costs with the realities of the market.

Jim Fitterling, Dow's chair and CEO, acknowledged the difficult nature of these choices but emphasized the importance of taking preemptive actions to navigate the ongoing slower-than-expected macroeconomic recovery. He stated, “These cost actions support our commitment to our long-term growth objectives while aligning spending levels to the realities of the current macroeconomic environment.”

Financial Implications and Future Outlook

As Dow sets its plans in motion, the company has indicated that it will incur charges estimated between $250 million to $325 million in the first quarter of 2025. These costs will primarily consist of severance and related benefits for impacted roles. Additionally, the expenses associated with implementing these changes are likely to range from $20 million to $30 million and will be accounted for as they are incurred.

Dow is preparing to engage with local stakeholders in each affected region to adhere to local regulations and consultation processes. This engagement underscores the company's commitment to responsible corporate governance even amidst tough economic choices.

About Dow Inc.

Dow Inc. is recognized as a leader in the materials science sector, primarily serving high-growth markets including packaging, infrastructure, mobility, and consumer applications. With operations in 30 countries and a workforce of approximately 36,000 employees, the company had reported annual sales of roughly $43 billion in 2024.

This strategic move to enhance cost efficiency reflects Dow’s commitment to not only navigate current economic challenges but also to position itself favorably for future opportunities. As the management evaluates further options throughout 2025, additional measures may be introduced to reinforce the company’s long-term competitiveness.

Through these actions, Dow aims to secure its future, staying true to its core values of innovation and sustainability while ensuring financial stability and operational excellence during these volatile times.