DuPont To Reduce $700 Million In Costs In 2016; 10% Of Workforce To Be Impacted

(RTTNews) - Chemical giant EI DuPont De Nemours & Co. (DD) or DuPont announced a 2016 global cost savings and restructuring plan designed to reduce $700 million in costs compared with 2015. About 10 percent of DuPont's global workforce will be impacted.

As a result of these actions, the company expects to record a pre-tax charge to earnings of $780 million, consisting of $650 million of employee separation costs and $130 million of asset-related charges and contract terminations.

The cost reductions include a range of structural actions across all businesses and staff functions globally to operate more efficiently. The actions will further consolidate businesses and align staff functions more closely with the businesses. The new plan builds on the company's previous operational redesign initiative.

The plan further simplifies the company's structure into fewer, larger businesses with integrated functions. This will lead to sustainable cost reductions, faster decision making and closer connections to end markets. The company will begin implementation of these changes immediately.

Given global economic conditions in agriculture and emerging markets, the company expects sales growth in 2016 to be challenging. Currency headwinds are expected to be about $0.25 per share, due to the continued strengthening of the U.S. dollar primarily against the Brazilian Real.

The company also expects $0.05 to $0.10 per share of pressure from a higher base tax rate, reflecting expectations of the geographic mix of earnings and cost savings that will be recognized primarily in the U.S.

The stock fell 4.8 percent in pre-market to $71.00.