A slowing global economy is causing Eastman Chemical Co. to eliminate jobs and delay salary increases.
In a March 15 email to Plastics News, an Eastman spokeswoman said that the Kingsport, Tenn.-based firm — whose products include Tritan-brand copolyester as well as a wide range of specialty chemicals — "has made the difficult decision to implement a modest and targeted reduction in our workforce."
Eastman "is looking at all options globally" for the job cuts, she added, but isn't currently providing details as to the number and location of those moves. The firm also has decided to delay employee salary increases where they're not already being implemented, except for operator and mechanic roles.
"We are operating in a difficult business environment and had hoped and expected to see stronger signs of economic recovery by now," the spokeswoman said. "Unfortunately, the ongoing U.S.-China trade dispute and the associated economic slowdown in China and Europe have created tremendous uncertainty, which has resulted in reduced demand for our products."
She added that "it has become obvious to us that we must do more to manage our costs as we work through these short-term challenges."
Eastman's sales in 2018 grew more than 6 percent to a little less than $10.2 billion, but net profit dropped more than 20 percent to less than $1.1 billion.
In Eastman's fourth-quarter earnings release, CEO and Chairman Mark Costa said that the firm "ended the year with a challenging fourth quarter, primarily due to reduced demand for specialty products in China as well as the slow flow through of higher raw material costs in an environment of customer destocking beyond normal seasonality."
The Eastman spokeswoman said March 15 that the firm is still on track with the series of debottlenecks and expansions for Tritan products that it announced in 2018.
"We expect those projects to be on line in the coming months," she said. "Our continued investment in Tritan and copolyesters highlights our continued commitment to providing our global customers with the highest-quality materials in the market."
On Wall Street, Eastman's stock price was down more than 1 percent to $78.60 in early trading March 15, as the broader market was up slightly. The price has increased almost 7 percent since Jan. 1.