Eastman Chemical Co. is reducing costs in a series of moves that will include job cuts.
In an email, an Eastman spokesperson said the job cuts will total 3 percent of the firm's global workforce. Based on current totals, that means Eastman would cut around 435 jobs in 2023.
Kingsport, Tenn.-based Eastman announced the moves on Jan. 26, the same day it released its full-year financial results. For the year, the firm's sales essentially were flat, up less than 1 percent to just under $10.6 billion. Eastman's net profit for 2022 declined 8 percent to $796 million.
In a news release, chairman and CEO Mark Costa said Eastman "enters 2023 during a challenging period for the global economy characterized by significant inventory destocking, soft end-market demand and uncertainty about the full year."
He added that the firm believes a manufacturing recession scenario began in the fourth quarter and that customers will continue with "aggressive inventory destocking" in the first quarter of 2023 with "modest volume recovery" in the back half of the year.
As a result, Eastman is taking actions to reduce manufacturing, supply chain and nonmanufacturing costs by more than $200 million in 2023. The firm also is taking "a range of actions" to improve operating cash flow to approximately $1.4 billion.
Costa said Eastman's pension and other post-employment benefits costs are expected to increase by approximately $110 million in 2023.
"We intend to maintain our demonstrated price discipline in our specialty product lines in order to recover spreads," Costa said. "Our raw material, energy and distribution costs increased by approximately $1.3 billion in 2022, and we expect these costs to moderate in 2023."
Sales in Eastman's Advanced Materials unit — including Tritan-brand copolyester — were up almost 6 percent in 2022 to just over $3.2 billion. But the unit's earnings before interest and taxes declined almost 28 percent to $376 million for the year.
On Wall Street, Eastman's per-share stock price was down 3 percent to $88.95 in early trading Jan. 27. The price is up 9 percent since Jan. 1.
