December 1, 2003
Yahoo! News
Business - AP (Associated Press)WILMINGTON, Del. - DuPont announced Monday that it will use job cuts and other "aggressive actions" to trim $900 million in costs over the next two years.
DuPont also said it hopes to increase annual revenue by 6 percent. The steps being taken by the company include rebalancing resources toward emerging markets, where it expects much of its growth in the coming years. Initial focus will be on China, with other areas of interest being Central and Eastern Europe and Brazil.
Chairman and chief executive Chad Holliday said the actions are "necessary to ensure the near- and long-term competitiveness of DuPont. In essence, we are launching a new DuPont," Holliday added. "We have a lot of change ahead of us — difficult, trying, yet ultimately gratifying change."
DuPont said the planned sale of its Invista textiles unit to Koch Industries is part of the plan. "With the anticipated sale of Invista, DuPont will be a smaller company with the potential for higher growth and profitability," Holliday said. "But unlocking that potential means doing things differently. If we are to meet our earnings growth objectives, which we will, we cannot support the complexity and cost entailed by diverse and specialized organizations and processes."
Company officials said infrastructure changes are expected to cut fixed costs $250 million by 2004 and $500 million by 2005. Another $200 million will be saved through consolidating product lines by at least 20 percent and efforts to improve profit margins. Job cuts and other cost improvements will account for the remaining $200 million, the company said.
Details on the number of jobs to be cut and restructuring charges will not be released, until DuPont announces its first-quarter earnings report April 27, the company said. Shares in DuPont rose $1.24 to close at $42.70 on the New York Stock Exchange.