DuPont to cut 5,000 jobs before Dow merger
31 Dec 2015
DuPont Co plans to cut 1,700 of the 6,100 jobs in its home state of Delaware next month, chief executive Edward Breen told staff in a memo yesterday.
The cuts come as part of Breen's effort to eliminate over 5,000 or 5 per cent of the company's 54,000 worldwide jobs before its proposed merger with Dow Chemical Co and their planned breakup into separate pesticide, materials, and "specialty products" companies.
Breen, who is lead director of the Comcast Corp board and chairman of Tyco International, told workers in his note that he and DuPont's board had considered alternatives.
However, in the end, their decision was unanimous because DuPont faces an "urgent need to restructure our cost base" and "reduce our corporate overhead."
The memo and other documents were filed with the Securities and Exchange Commission yesterday.
DuPont reported profits of $3.5 billion on $35 billion sales, last year. Investors led by hedge fund manager Nelson Peltz had pressed the company to cut more expenses and ensure that research was efficient and product-focused.
The layoffs, representing about a quarter of DuPont's Delaware-based employees, come as DuPont consolidates some of its scientific research operations and moves corporate functions to other locations that are closer to its customers, Breen wrote.
"The effect in Delaware will be significant, reflecting the urgent need to restructure our cost base and, as part of that effort, reduce our corporate overhead costs so that we can remain competitive," he wrote.
Under Delaware law, DuPont is required to file a notice of the layoff plans by 31 December. The law requires the company to outline its lay off plan publicly before all affected individual employees were told the news, Breen said.
DuPont was already in the process of cutting its Delaware workforce, which was down to about 6,100 from over 7,000 before it spun off its performance-chemicals division as Chemours Co in July.
In a mid-December announcement, DuPont, said it planned to cut around 10 per cent of its global workforce, but had not outlined how many of the affected positions would be in Wilmington.
"Especially given that we are in the middle of the holidays, we would have preferred to wait until individual notifications were complete before reporting the full local impact," Breen wrote.