PPG Industries (PPG.US) to Cut 1,800 Jobs in Europe and North America and Sell Businesses, Expected to Save $175 Million Annually
PPG Industries (PPG.US), a well-known paint and coatings manufacturer, announced it would cut 1,800 jobs and close some factories in the US and Europe as part of its cost-cutting plan. The company also plans to sell its construction coatings business in the US and Canada, as well as its silica products business, with the transactions expected to be completed by the end of 2024 or early 2025. PPG expects these cost-cutting measures to save about $175 million in pretax expenses annually, including $60 million in 2025. The company will record $250 million in pretax expenses in the fourth quarter of 2024.
According to the company, its cost-cutting plan is mainly aimed at reducing its structural costs in Europe and some other global businesses. PPG said the decision was made after recently closing two business sale agreements, including the sale of its construction coatings business to American Industrial Partners for about $550 million and the sale of its silica products business to Qemetica, a Polish chemical company, for $310 million. PPG's construction coatings business includes well-known brands such as Dulux, Glidden, Olympic, and Liquid Nails.
Chief Executive Tim Knavish mentioned in a statement that the job cuts were made to adjust the company's fixed cost base and rationalize its size after the divestitures of these two businesses. These moves were part of the company's decision after its strategic assessment at the beginning of the year.
Moreover, PPG's third-quarter profit did not meet Wall Street expectations, partly due to a decline in sales in its industrial coatings segment.