Lehigh Valley, Pennsylvania -- Air Products is cutting 1300 jobs in a restructuring aimed at producing a lower cost structure. The group said the deal, which will see it take a pre-tax charge to earnings in the first quarter of $140 to $160 million, is aimed to "better align its businesses to reflect rapidly declining economic conditions around the world."
The company said it is also revising its earnings outlook for its fiscal 2009 first quarter.
About three-quarters of the restructuring charge is for severance costs, as the company cuts about seven percent of its global workforce, the group said.
In polyurethanes, Air Products supplies prepolymers used to make cast elastomers, as well as PU curatives for elastomers.
Lehigh Valley-based Air Products aims to cut overheads and infrastructure costs, reduce and refocus some technology and business development spending, and lower plant operating costs.
The restructuring should reduce fixed costs by about $50 million in fiscal 2009, with savings expected to exceed $110 million in fiscal 2010 and beyond, the company said.
Chairman, president and chief executive officer John McGlade said, "These cost-reduction actions are necessary to reach our margin improvement goals. They are also in response to declining business conditions around the world. This is clearly one of the weakest business environments we have seen across our end-markets. However, our financial position remains strong, and with a significant portion of our business under medium- and long-term supply contracts, we expect to continue generating strong cash flow."