DowDuPont Gears Up For More Job Cuts In Effort To Save $3B

DowDuPont’s first earnings report since merging into one company was full of big announcements.

(AP Photo)
(AP Photo)

DowDuPont’s first earnings report since merging into one company was full of big announcements.

Here are the takeaways:

Breaking Up Is Hard To Do

The company’s CEO, Ed Breen, reported that it will take longer than expected to split into three separate segments. The original plan called for an 18-month process of breaking up into separate businesses for materials science, agriculture and specialty chemicals. Now Breen projects that it will take up to two years.

Job Cuts Are Coming

DowDuPont wants to cut jobs and sell facilities to capture $3 billion in annual savings. The company didn’t say exactly how many jobs could be on the line, but estimated that it will spend up to $975 million on severance payouts and other benefits costs.  

A Biofuel Plant Is Up For Grabs

The company plans to sell its cellulosic ethanol business, which converts corn part into motor fuel. The sale will include a $200 million biorefinery in Iowa that has the capacity to produce 30 million gallons of ethanol a year made from corn stalks, leaves and cobs (ethanol is typically made from corn kernels).

One investor had criticized the refinery as being one of DuPont’s “speculative and expensive corporate science projects.” Breen told investors that going forward, the biorefinery is not going to “be the core” of DowDuPont’s future.

The plant currently has about 90 employees.

According to BiofuelsDigest, it might be tough to find a buyer because the market is thick with competitors and another company — Beta Renewables — is already up for sale.

Sales Are Up

The company netted $514 million in income during the third quarter, topping Wall Street expectations. The adjusted revenue was up 7.6 percent to $18.3 billion, which was higher than the $18 billion predicted by analysts.

Every segment of DowDuPont reported sales increases, excluding agriculture, which is suffering from high pesticide inventories. Corn seed sales were slow in South American and sales were flat for nutrition and biosciences.

Per share, the company reported a profit of 32 cents.

 
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