DuPont to Lay Off 1,700 Ahead of Merger With Dow Chemical
WILMINGTON, Del. – DuPont (DD) will slash about 28 percent of its Delaware workforce when it delivers 1,700 pink slips to employees in the early part of 2016 ahead of a merger with Dow Chemical, the Washington Post reported this morning.
While unwelcome news for many, the layoffs were not unexpected. In early December, the two companies agreed to a merger which is expected to create $130 billion in market value. The combined company will be named DowDuPont and will be the second-largest chemical company in the world behind Germany-based BASF SE. DowDupont intends to break up the new company into three publicly traded companies through tax-free spin-offs, the companies jointly announced. The new divisions will include an agriculture company, a material sciences company and a specialty products company. The new agricultural company, which is estimated to have a value of about $19 billion, will unite both company’s crop and seed businesses, propelling it to the forefront of the seed and pesticide industry, passing industry giant Monsanto Co.
That specialty products company is expected to combine DuPont‘s nutrition and health, industrial biosciences, safety and protection, and electronics and communications segments with Dow‘s electronic materials business. It is likely an October deal struck between DuPont and Bay Area-based Caribou Biosciences to advance a CRISPR-derived genome editing technology platform, will fall under this business division.
The merger was expected to produce a number of layoffs as companies reduced redundancies. The layoffs are part of DuPont’s newly announced efficiency restructuring program for 2016 that is expected to save about $700 million. DuPont said its restructuring program will include a reduction of its global workforce by approximately 10 percent.
The Delaware layoffs are not the first to strike DuPont or one of its entities. Earlier this month DuPont’s spinoff company Chemours announced a global workforce reduction of approximately 400 positions, approximately 5 percent of its total employee and contractor base. This action is part of ongoing efforts to streamline and simplify the structure of the organization worldwide and to reduce costs, the company said. In May, Dow announced it was cutting 3 percent of its global workforce, between 1,500 and 1,750 positions, in response to an activist investor.
In June, Dow’s chairman and chief executive officer Andrew Liveris was under investigation by the U.S. Securities and Exchange Commission over allegations he misused company funds for personal benefit. The SEC investigation comes on the heels of accusations made against Liveris in recent lawsuits and complaints by former employees. Liveris is expected to be the chairman of the new company and Edward Breen, the chief executive officer of DuPont, will be the new CEO of DowDuPont.
December 30, 2015
By Alex Keown, BioSpace.com Breaking News Staff