WEST PATERSON, N.J. (AP) -- Cytec Industries Inc. on Thursday lowered its fiscal 2008 profit estimate and announced plans to slash 600 jobs, mostly in its specialty chemicals product lines, as the company builds its other segments and adjusts to the global economic downturn.
Cytec said the slowing economy has reduced demand for many of its industrial products, and with no short-term turnaround expected, it must cut costs.
The layoffs will eliminate about 10 percent of Cytec's headcount and result in an estimated restructuring charge of up to $140 million over the next several quarters, including $50 million in asset write-downs. The company expects the move to save $85 million a year by the end of 2009.
"A key objective is to achieve a sustainable improvement in our net working capital and deliver approximately $200 million in additional cash flow by the end of 2009," said Dave Drillock, chief financial officer of Cytec, in a statement.
"With the aggressive actions just noted and taking into account the current demand outlook, we do not foresee any difficulties funding our planned investments in our growth businesses, the restructuring initiatives, debt service and our current dividend," he added.
On Thursday Cytec also lowered its outlook for 2008 adjusted profit to a range of $3.45 to $3.50 per share from a prior forecast of $3.75 to $3.85 per share. The company expects to record a pretax charge of up to $500 million in the 2008 fourth quarter to write down the value of goodwill in its surface specialties segment, which makes resins.
Shares of Cytec fell 73 cents, or 3 percent, to $22.78 in morning trading.