Posted on Mon, Apr. 12, 2004
DuPont to cut 3,500 jobs
RANDALL CHASE
Associated Press
DOVER, Del. - Labor representatives reacted strongly Monday to DuPont's announcement that it
will eliminate 3,500 jobs, or about 6 percent of its global work force, by the end of this year as
part of previously announced cost-cutting plans.
DuPont announced in December that it would trim $900 million in costs over the next two years by
cutting jobs, streamlining product lines and making other changes.
The Wilmington-based chemical giant said Monday that it will eliminate about 3,000 positions,
roughly two-thirds of them in the United States and Canada, and expects to cut another 500
positions through attrition.
Chairman and CEO Charles O. Holliday Jr. sent DuPont employees an e-mail Monday morning to
inform them of the job cuts.
"It's just more of the same from Mr. Holliday; he's either selling businesses or cutting jobs," said
Dave Gibson, president of Local 1186 of the United Brotherhood of DuPont Workers in
Philadelphia. "The one job cut that needs to be made is his."
Gibson, whose local represents about 240 employees, said only about 10 Philadelphia workers
would be affected by the job cuts, but he was surprised by the total number. Last week, Gibson
said he expected about 2,500 jobs to be lost companywide.
"I undershot," he said. " ... We weren't expecting that many people."
Jim Rowe, head of Local 2-943 of the Paper, Allied-Industrial, Chemical and Energy Workers
International Union in New Jersey, said DuPont's continued downsizing over recent years has
gotten to the point where work-force safety is becoming a concern.
"I think they went well past downsizing," said Rowe, whose PACE local represents about 600
workers at DuPont's Chambers Works facility in Deepwater, N.J., where Rowe said 36 positions
will be eliminated. "They're mismanaging this whole company."
In a prepared statement issued earlier Monday, Holliday said the job cuts are painful but
necessary.
"These are difficult but necessary decisions as we align our resources with market needs and
adjust the size of our infrastructure following the anticipated separation of INVISTA (a textiles
subsidiary)," Holliday said. "These actions will help assure the near- and long-term
competitiveness of our businesses worldwide as well as progress toward our mission of
sustainable growth."
In trading on the New York Stock Exchange, DuPont shares closed up 63 cents, or 1.5 percent, at
$44.06.
In addition to trimming its own work force, the company will eliminate 450 contractor positions,
most of them in the United States.
The cuts do not include the roughly 18,000 employees of INVISTA, which is being sold to Koch
Industries in a deal scheduled to close by the end of this month. Excluding that division, DuPont
employs about 59,000 people worldwide.
DuPont spokesman Clif Webb said the cuts announced Monday will be spread across the
company's business units and include all levels of the work force, including management.
"We have to reduce our costs, and we have to refocus and rebalance our assets," he said.
Gov. Ruth Ann Minner said state officials would provide training and placement for some of the 650
Delaware workers who will be affected by the job cuts. State economic development director Judy
McKinney-Cherry said the state is working with DuPont on career fairs to help workers find other
jobs.
"This is what DuPont needs to do ensure that they remain competitive in a global economy," she
said. "DuPont has re-engineered itself multiple times in its history; this is just another example of
that."
To meet its overall cost-cutting goal, DuPont plans to reduce fixed costs by $700 million. The job
cuts are expected to create about $325 million in annualized savings, and the company expects
about $375 million in fixed-cost reductions by 2005 by reducing spending in areas such as contract
services, supplies, telecommunications and information technology. Those savings represent
about 6 percent of the company's annual spending on supplies and services.
In addition to the fixed-cost reductions, DuPont expects to save about $200 million through such
things as eliminating some of the 508,000 product variations spread among its 78,000 product
lines to free up capacity for higher-value products and trimming raw material and energy costs.
DuPont expects to take a one-time second-quarter charge of 17 cents to 19 cents per share as a
result of the restructuring, largely for severance costs. The company will decide the exact amount
of restructuring charges during the second quarter.
DuPont will issue its next earnings report April 27.
DuPont, founded in 1802, operates in more than 70 countries. The company offers a wide range of
products and services in the areas of agriculture, nutrition, electronics, communications, safety,
construction and transportation.
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