The job cuts and cost reduction will be "very targeted at lower margin regions," Tate said. When asked if that included high-cost operations in Europe, Tate replied "that's a fair assumption."
Dow employs approximately 36,000 globally.
He added that, proportionally, half of the cost reduction will come from Dow's Packaging & Specialty Plastics unit, which includes a major polyethylene resin business. Between $500 million and $700 million of the reduction will be in direct costs, primarily for purchased services and third-party contract labor.
Also in 2025, Dow and other U.S. PE makers could be impacted if proposed tariffs lead to retaliatory tariffs on PE or other U.S. exports. U.S. PE makers exported almost half of their production in 2024, setting an all-time record in that category.
Tate said Dow “continues to evaluate” the tariff situation. “We do export a lot of polyethylene to China, but we have a robust supply chain,” he added.
In a separate earnings news release, officials said Dow also would reduce its 2025 capital expenditures budget by $300 million to $500 million. Tate said Dow's major PE and sustainable materials expansion in Fort Saskatchewan, Alberta, wouldn't be affected by those cuts. The Alberta project "remains on time and on budget," he added.
The broader economy "is a mixed bag right now," Tate said. "We're still seeing packaging, electronics and tech as strong, but areas like building and construction, appliances and furniture are challenging."
Dow Chairman and CEO Jim Fitterling said in a news release that the job cuts and cutback decisions "are difficult, [but] we must continue to take proactive actions to reduce costs while we navigate through this ongoing slower-than-expected macroeconomic recovery."
He added that "as 2025 progresses, we will continue to evaluate options to reinforce our competitiveness and take further action if necessary."
Dow will record a charge of $250 million to $325 million in the first quarter of 2025 for costs associated with these activities. That charge primarily includes severance and related benefit costs.
Dow also released fourth-quarter and full-year financial results Jan. 30. Sales for the quarter were down 2 percent to a little more than $10.4 billion, with full-year sales down almost 4 percent to just under $43 billion. Dow posted a fourth-quarter loss of $35 million, but the firm's profit for the year still was up more than 80 percent to $1.2 billion.
Full-year sales at Dow's Packaging & Specialty Plastics unit were down almost 6 percent to just under $21.8 billion, with operating profit down 12 percent to less than $2.4 billion. The unit's sales volume in pounds was down 2 percent for the year.
Dow's Industrial Intermediates & Infrastructure business, which includes polyurethanes, saw 2024 sales fall more than 5 percent to slightly less than $11.9 billion. That unit posted 2024 operating profit of $125 million, essentially flat with the prior year. The unit's sales volume in pounds was up 1 percent for the year.
Dow is one of the world's largest producers of PE and specialty resins. The firm posted sales of almost $45 billion in full-year 2023.
On Wall Street, news of the pending cuts had Dow's per-share stock price down almost 3 percent to $40 in pre-market trading Jan. 30.