Dow Chemical: Layoffs hit an industry giant
Dow Chemical, the nation’s largest chemicals maker, said this week it would cut 5,000 jobs, or 11 percent of its workforce, said Francesco Guerrera in the Financial Times. “In an effort to preserve cash and withstand the global economic downturn,” Dow also plans to slash production worldwide, closing or temporarily idling a third of its plants. By selling off underperforming divisions and reducing labor costs in the U.S. and Europe, the company hopes to save $1.4 billion over the next two years.
The sudden recent drop in consumer spending has hit Dow hard, said Ana Campoy in The Wall Street Journal. The chemicals giant produces raw materials used in countless consumer products—“ranging from cars to vitamins to sneakers”—for which demand has dried up. An internal reorganization, announced in conjunction with the cuts, is intended to shift the company’s business model away from cheap commodities such as plastics and toward the “higher-margin” specialty chemicals used in the high-tech sector.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
Unemployment: Laid-off workers occupy factory
About 200 employees of a shuttered Chicago window factory staged a sit-in this week to demand severance pay, said the Associated Press. The employees of Republic Windows and Doors, which closed last week, claim they are entitled to 60 days’ severance pay. Political leaders including President-elect Barack Obama and Illinois Gov. Rod Blagojevich demanded that Republic’s chief creditor, Bank of America, reinstate the company’s line of credit—a move that could allow the company to pay the workers and perhaps continue its operations.
NBC: Ratings woes prompt a shake-up
With its NBC television network mired in last place, General Electric’s NBC-Universal entertainment division shook up its top management last week, said Meg James in the Los Angeles Times. Three executives—studio production head Katherine Pope, top network programmer Teri Weinberg, and reality-show honcho Craig Plestis—were forced out. NBC’s executive shuffle “highlights the problems it and other networks face in continuing to produce high-quality TV shows as advertisers slash spending” and viewers migrate to the Internet.
Legal affairs: Firm fails after partner’s bust
A 250-lawyer New York law firm collapsed this week after its founding partner was charged with cheating hedge funds out of more than $100 million, said William Rashbaum and Alison Leigh Cowan in The New York Times. The U.S. alleged that Marc Dreier lied to three hedge funds when he claimed to represent a developer purportedly seeking to sell notes to investors. The charges came only days after Dreier was arrested in Canada on a charge of criminal impersonation. Authorities there say he lied about his identity during a legal proceeding in order to try to complete a business transaction. He declined comment.
Playboy Enterprises: Christie Hefner steps down
Christie Hefner resigned this week as CEO of Playboy Enterprises, saying she wants to “give back” through philanthropic work, said Greg Burns in the Chicago Tribune. Playboy’s share price has suffered “as advertising and circulation at its flagship magazine plunged and its adult TV and movie programs lost ground to free content on the Web.” But Hefner, 56, says the board did not seek her resignation. Her father, Hugh Hefner, who founded the company in 1953, remains its chief creative officer.
