Dow Chemical to close facilities, cut 5,000 jobs

NEW YORK (Reuters) - Dow Chemical Co (nyse: DOW - news - people ) said Monday it would close 20 facilities, divest several businesses and cut 5,000 jobs, or 11 percent of its global workforce, in response to the global economic slump.

Dow said the action, which comes less than a week after its U.S. rival DuPont (nyse: DD - news - people ) announced cutbacks, is an acceleration of its "transformational strategy" and will lead to annual cost savings of $700 million by 2010.

"We are accelerating the implementation of these measures as the current world economy has deteriorated sharply, and we must adjust ourselves to the severity of this downturn," Chairman and Chief Executive Officer Andrew Liveris said in a statement.

The Midland, Michigan, chemicals maker is also in the process of buying specialty chemicals maker Rohm & Haas for $15.3 billion, a move the companies said would yield $800 million in savings by 2010.

Dow will cut 5,000 full-time jobs, close 20 facilities in high-cost locations and sell non-strategic businesses. The company will also temporarily idle 180 plants and reduce its contractor workforce by 6,000.

Fears that the year-long U.S. recession will deepen prompted DuPont to cut 2,500 jobs and phone company AT&T to eliminate 12,000 jobs.