Dow Announces Major Restructuring Plan

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land Texas)

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Summary

Chemical company Dow has announced a major restructuring plan that will streamline operations and eliminate approximately 13% of its workforce.

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The Latest Plan

Chemical company Dow Incorporated, based in the U.S. but with a strong global presence, announced its "Transform to Outperform" corporate restructuring plan, resulting in the elimination of about 4,500 direct Dow jobs as well as some third-party contractors and resources. The announcement came as the company reported its quarterly net sales were more than 9% lower than a year earlier.

In the company's fourth-quarter 2025 results, released last Thursday, Dow reported net sales of $9.5 billion, a more-than 9% decline from the same quarter of 2024. The company reported a fourth-quarter net loss of $1.5 billion and full-year 2025 net loss of $2.4 billion, compared with net income of $1.2 billion for full-year 2024. The results reflect an overall oversupply of several products within the Chemical Processing Industry.

Dire Times for Chemicals

A Wood MacKenzie piece published last year on the state of the industry stated, "The petrochemical industry stands at a critical juncture as it experiences one of its most challenging periods in recent history. The market is burdened by persistent oversupply and underwhelming demand growth." The piece points to large capacity additions in China as being part of the cause of the present oversupply for many commodities.

A Deloitte outlook on the sector in 2026 presents a somewhat dismal picture of the industry's present status: "Going into 2026, the chemical industry is nearing the bottom of a capital cycle. Despite resilience through pandemic shocks and inflation, the sector now faces overcapacity, soft demand, and global uncertainty." While Deloitte's outlook forecasts a recovery from the down-cycle to begin this year, its analysis still points to problems: "Overcapacity in polyethylene, polypropylene, and other olefins and aromatics will likely persist."

While Dow largely exited the polypropylene business in 2011 by selling its assets to Brazil's Braskem, polyethylene and other olefins and aromatics remain key products in Dow's production slate.

The Deloitte document also points out that chemical companies will be streamlining, specifically noting an increase in the implementation of artificial intelligence (AI) to increase efficiencies. And that is exactly what Dow's Transform to Outperform calls for, in part.

The End Goal

Dow's targeted goal in the restructuring is a $2 billion "uplift" in near-term operational earnings before interest, depreciation and amortization (EBITDA). One of the major structural changes involves reducing Dow roles by 4,500 people, as well as eliminating some third-party resources. Dow employs about 34,600 people throughout the world, meaning it is planning about a 13% reduction in its workforce. In addition to ideas such as modernizing how it grows its customer base and resetting cost structures, Dow said its plan will streamline end-to-end work processes, leveraging automation and AI in areas like maintenance, production and fulfillment to enhance efficiencies.

Previous Economic Streamlining

Dow's latest plan is in addition to a $1 billion savings plan that it announced early last year, resulting in cutting about 1,500 jobs in 2025 as well as announcing the closure of three European plants followed by the cancellation of a German chemical-recycling project the following month. Those plants will close this year and next year.

The closing plants include:

• An ethylene cracker in Bohlen, Germany. (Click here to see plant profile.)
• An olefins complex in Schkopau, Germany. (See plant profile.)
• A silicone-products plant in Barry, U.K. (See plant profile.)

In addition, a fire in Plant B, which produces propylene oxide, at the company's massive facility in Freeport, Texas, last year could lead to the permanent closure of that part of the complex, removing 800,000 tons per year of propylene from the market.

Dow's plans also solidify a delay announced last year in the company's Path2Zero green polyethylene in Fort Saskatchewan, Canada. Meant to provide net-zero scope 1 and 2 emissions, Dow made a final investment decision on the project in 2023, when a downturn in the market had begun. A delay on the project was initially mentioned in April 2025. Originally, Dow had planned Phase I operations to begin in 2027. The company's latest plan for the project puts Phase I startup by the end of 2029 and Phase II by the end of the following year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more by viewing the related project reports.

Transform to Outperform

Dow's latest plan doesn't detail any plant closures at this stage, but rather a streamlining in operations that seems to span multiple areas. With the 4,500-person staff reduction as well other moves that include resetting costs structures and modernizing "how it serves customers," Dow expects to realize its $2 billion near-term EBITDA recovery to be approximately two-thirds from "productivity improvements" and one-third from growth. The company anticipates one-time costs associated with the plan to be between $1.1 billion and $1.5 billion, including $600 million to $800 million in severance. Dow Chief Executive Officer Jim Fitterling said in a press release that the program "will drive significant simplification in how work gets done" and "further accelerate measures we have already taken to address the prolonged trough and structural industry challenges."

Key Takeaways

• Dow has announced it will reduce its workforce by 4,500 workers, or about 13% of its employees
• The company will incorporate more AI and automation to streamline operations.
• Dow hopes to realize a gain of $2 billion in near-term operating EBITDA.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).