DSM cuts 1000 jobs in economic rough patch
The company said DSM’s Life Sciences Business, especially Nutrition, and DSM Dyneema, have been relatively unaffected by the current economic circumstances and continue to perform well.
However most of the material sciences businesses have been affected. These business include automotive, building and construction, coatings, electricals and electronics.
Consequently, the chemical giant has cut its operating profit outlook for the full year to €900m. When it published its Q3 results in October, the outlook was €1000m.
A spokesperson for the company said the measures are being introduced worldwide and companywide – not just in the businesses that are struggling at present. It is too early to say whether the nutrition businesses could be hit by job cuts, however.
Other measures are the reduction of temporary workers, postponement of projects, and close attention to purchasing prices.
Feike Sijbesma, chairman of the managing board, said: “We are swiftly taking the necessary actions to maximize our cash flow and preserve profitability by reducing working capital and costs while at the same time further strengthening out competitive position.”
Job cut savings
The reduction of 1000 jobs represents 5 per cent of the workforce. The total savings are expected to be up to €100m a year, to be fully achieved in 2010.
The one-time cost is expected to be around €50m, of which €20m will show as an exceptional item in the Q4 results.
