DSM to cut 5% of workforce
December 15, 2008
by Eric Schroeder
HEERLEN, THE NETHERLANDS — Royal DSM n.v., a life sciences and materials sciences company based in The Netherlands, said it is cutting 1,000 jobs, or approximately 5% of its work force, in an effort to "strengthen the profitability and future competitiveness" of the company. The job cuts are expected to save the company up to €100 million ($136 million) per year by 2010, DSM said.
The company also issued a profit warning saying operating profit for 2008 before one-time items will be €900 million ($1.2 billion). In October, DSM said it expected full-year profit to be €1 billion ($1.35 billion).
"It is clear that the turmoil that began in the financial sector is now seriously eroding business and consumer confidence in the wider economy," said Feike Sijbesma, chairman of the DSM managing board. "Although our life sciences businesses are continuing to perform well, most of our materials sciences businesses have increasingly been affected by the economic downturn. We are swiftly taking the necessary actions to maximize our cash flow and preserve profitability by reducing working capital and costs while at the same time further strengthening our competitive position."