From Philadelphia Inquirer
WILMINGTON, DE — DuPont Co. said yesterday that it will reduce its workforce by 6 percent, or 3,500 positions, by the end of the year to save $325 million annually.
The Wilmington, Del.-based chemical company, whose products include Corian surfaces, Tyvek house wrap and auto paint, said that about 3,000 positions would be eliminated through severance programs and about 500 through normal attrition. The company also said it would stop using 450 contractors.
Most of the cuts, which are part of a plan announced in December to shave $900 million in annual costs by next year, will take place in North America and Western Europe, with all businesses and types of jobs being affected, the company said.
To cover severance for hourly and management employees, DuPont said it would take a second-quarter charge of 17 cents to 19 cents per share, or about $170 million to $190 million.
DuPont provided details on other efforts to reduced fixed costs. They include slashing $375 million, or 6 percent, from the more than $6 billion it spends annually on contract services, supplies, telecommunications and information technology.
Variable costs are to be reduced by $200 million. That includes $100 million in savings by streamlining its product offerings.
Merrill Lynch & Co. analyst Donald Carson said in a research note yesterday that he assumed DuPont would realize and retain only about 60 percent of the total $900 million of targeted cost savings.
“DuPont’s cost-reduction record has been disappointing until recently, as DuPont was slower than some peers in recognizing the need to significantly reduce its cost footprint,” Carson said, “and benefits from restructuring have not been visible on the bottom line.”
DuPont’s stock closed at $44.06, up 63 cents, or 1.45 percent.
During the last three years, DuPont has announced 13,400 permanent layoffs, including contractors. After the current round and the sale of its Invista textile and fibers unit are completed, DuPont will be left with 55,000 employees.
Wilmington-based Invista, which is being sold to Koch Industries Inc. for $4.2 billion, employs about 18,000. At the end of 2000, DuPont employed 93,000, including 5,000 with DuPont Pharmaceuticals, which was sold in 2001.
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