Wilmington, DE, Jan. 12--The DuPont Co. will cut at least 2,500 staffing and support jobs worldwide by the end of next year as part of a recently announced overhaul, said experts familiar with the company, according to Delaware Online.
"The process is under way and there are many decisions yet to be made," spokesman R. Clifton Webb said. "Until this work is complete, we will not comment on rumors or speculation."
The predictions come as observers begin to assess the scale of the overhaul DuPont Chairman and Chief Executive Charles O. Holliday Jr. announced on Dec. 1, which is expected to save $900 million by the end of 2005 and "shift the center of gravity" to overseas markets.
Holliday said at the time the restructuring would be DuPont's biggest in a decade, but the company released few details except to say the job cuts would come primarily from "staff functions and support services."
It said it wouldn't be more specific until April 27, when it releases first-quarter earnings. However, Webb confirmed last week that the company plans to make an announcement Monday concerning its "general organizational structure."
DuPont also has confirmed that staff and support services comprise 13 job categories ranging from public relations to human resources to the hospitality division that owns the Hotel du Pont in downtown Wilmington. Jobs in those categories are concentrated in the company's world headquarters in Wilmington, and regional headquarters in Tokyo, Sao Paulo, Geneva, Toronto and Mexico City. The company also said some job cuts could come from manufacturing operations.
DuPont would not say how many people work in staff functions and support services worldwide or in Wilmington alone. The company employs about 9,900 people in Delaware.
In addition to potential job cuts, analysts have begun to predict other changes associated with the overhaul. Two analysts said DuPont could relocate the headquarters of its electronics platform from Wilmington to Asia.
Fulcrum Global Partners analyst Frank J. Mitsch, the first Wall Street analyst to correctly forecast DuPont's plan to sell its Invista fibers business to Koch Industries Inc. of Wichita, KS, said he expects DuPont to cut "at least 2,500" jobs worldwide.
But Balaji Singh, president of Houston-based Chemical Market Resources Inc., predicted the number would be higher, in part to help bring DuPont's payroll in line with its peers. Last month, rival Dow Chemical Co. revamped its global business organization, adopting three business platforms. A year ago, the company announced a restructuring plan that over the year cut 3,000 to 4,000 jobs from its payroll of 50,000. Singh consults with both companies.
Singh also noted that unlike Dow or any other rival, DuPont is faced with shrinking a company that has for decades relied on a vast support staff to support a more complex range of products. Dow makes and sells chemicals, as well as some products from those chemicals. DuPont historically has gone further.
"DuPont is probably going to have to catch up a little bit in terms of reorganizing to get to where Dow is now," said Howard Rappaport, global practice director for Chemical Market Associates, another Houston-based consultant to DuPont and its rivals. "A very rough estimate [of job cuts] would certainly be in the thousands."
One Wall Street analyst who isn't predicting a specific number of DuPont job cuts nevertheless expects the company to collapse 22 discrete business groups into five to match the company's February 2002 reorganization into five business platforms: Agriculture & Nutrition, Coatings & Color Technologies, Performance Materials, Safety & Protection, and Electronics & Communication Technologies.
"Instead of each [unit] having a finance head, research and development head, etc.--the company hopes to go from 22 of everything to five of everything," Buckingham Research analyst John E. Roberts recently wrote in a note to clients.
DuPont has said it expects the unspecified job cuts and other belt-tightening related to its infrastructure to save $500 million before taxes by the end of next year. The company expects to save another $400 million during that time in other ways.
That would exceed the savings from the previous belt-tightening in April 2002, when DuPont Chief Operating Officer Richard Goodmanson projected annual savings of $120 million before taxes over two years by cutting more than 2,000 Invista jobs. Goodmanson, who restructured Invista ahead of its sale to Koch, announced Nov. 17, is leading DuPont's current cost-cutting efforts.
