Rohm and Haas slashes 900 jobs in second round of cuts
The specialty chemical firm has already said goodbye to 950 workers in June and announced the latest job cuts as part of a package of measures designed to generate $90m in annual savings.
Cost-cutting measures
Other steps include cuts in production, salary freezes, plant closures and the discontinuation of unprofitable lines.
“Our actions today are intended to adjust our operations to current business conditions, which reflect softening markets worldwide,” said president and COO Pierre R. Brondeau.
The charges related to these cost-cutting measures will add up to $90m in the fourth quarter of 2008. Nonetheless, the company expects adjusted earnings per share from continuing operations for the quarter to beat current analyst expectations.
Dow acquisition
Rohm and Haas is due to be acquired by Dow for $15.3bn but the deal was put into doubt when the chemical giant lost a $17.4bn joint venture with Kuwait's state-run Petrochemical Industries Company last month. Dow had wanted to use part of the cash from the venture to pay for Rohm and Haas.
Despite the set-back, the company pushed ahead with the deal and is now seeking regulatory approval from the US Federal Trade Commission.
It is facing difficulties financing the deal and both Moody’s and S&P are threatening to downgrade its debt to junk, if the Rohm & Haas acquisition goes ahead without long-term financing in place.
Dow itself is taking bold steps to maintain its profits in light of the deteriorating market conditions. The company said last month that it would cut 5,000 full-time jobs and leave many of its plants idle.
