The snail's pace recovery from the Great Recession just claimed thousands more victims, with more to come.
On Wednesday, The Dow Chemical Co. (NYSE: DOW), the largest chemical maker in the U.S. by sales, announced 2,400 job cuts. It will also shutter 20 plants in attempts to reduce costs by $500 million as it deals with the gnawing global slowdown.
Facilities to be closed are dotted around the world and include locations in the United States, Belgium, the Netherlands, Spain, the United Kingdom and Japan, according to a press release from the Midland, MI-based company.
The Dow job cuts amount to 5% of the company's global workforce.
Dow CEO Andrew Liveris noted back in July the company is operating in the worst conditions since 2009.
Liveris said in a statement, "The reality is we are operating in a slow-growth environment in the near-term. While these actions are difficult, they demonstrate our resolve to tightly manage operations-particularly in Europe-and mitigate the impact of current market dynamics."
And Dow isn't alone.
Dow Chemical (NYSE: DOW) Job Cuts Join Long List
The news of the Dow job cuts comes on the heels of Dupont, (NYSE: DD), the largest U.S. chemical company by market valuation, announcing Tuesday it is eliminating 1,500 jobs due to waning demand for its paint pigments and solar cells.
"Chemicals are a very economically sensitive industry. Economic growth in 2012 has slowed to a trickle, and that has spooked a lot of people," Jake Dollarhide, CEO of Tulsa, OK-based Longbow Asset Management told Bloomberg News.
Dollarhide added that the planned job cuts by the pair are a clear indication that the global economy continues to struggle from the recession.
Facing the looming threat of massive cuts to defense spending, United Technologies Corp (NYSE: UTX) also announced Tuesday it has reduced its sales outlook for the full year and is planning to cut its workforce.
CEO Louis Chenevert pointed to "the lack of recovery in the commercial aerospace aftermarket and continued uncertainty in the global economy" as reasons for the glum forecast.
"Obviously, we're looking carefully at the macro environment. In Europe, the economy continues to be very sluggish, and in North America it's a slow recovery," Chenevert explained to Reuters.
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Last week chipmaker Advanced Micro Devices Inc. (NYSE: AMD) said it would slash headcount by 15%, or 12,000, as it deals with declining demand due to the explosive consumer trend toward tablet computers that is chipping away at sales.
Cummins Inc. (NYSE: CMI) announced earlier this month it is taking actions to respond strategically to the current economic environment by cutting costs and jobs. The engine maker plans work week reductions, shutdowns at some facilities and will reduce its workforce by 1,000-1,500 by year's end.
How Long Will Job Cuts Continue?
The job picture for 2013/2014 remains bleak.
The unemployment rate is an unhealthy (and questionable) 7.8%.
The Bureau of Labor Statistics counts 12 million Americans who are looking for work. Add in those who are no longer being counted and the tally swells to 23 million.
"Things are improving, but it's really a small down payment on a very big project we've got ahead," James Glassman, senior economist at JPMorgan Chase & Co. (NYSE: JPM) said on Bloomberg Radio following the September U.S. jobs report
Scores of businesses owners, big and small, say a great deal depends on how and when Congress finally resolves the fiscal cliff (the expiration of tax breaks and massive spending cuts set to kick in Jan. 2). In anticipation of going over the cliff, many have already cut back spending, put expansion projects on hold and implemented hiring freezes.
The Nov. 6 election may paint a clearer, and hopefully brighter, picture. Romney has pledged to create 12 million jobs with rising incomes if elected.
Stay tuned for the crucial October jobs report Nov. 2.
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- Bloomberg News:
Dow Chemical to Eliminate 2,400 Jobs and Close Factories
Companies sharpen job-cutting shears as sales slow