NEW YORK (CNN/Money) -
Chemical maker DuPont Co. is cutting about 3,500 positions, or about 6 percent of its staff worldwide, the company announced Monday.
DuPont (DD: Research, Estimates) said the cuts will come primarily in North America and Europe. There will be 3,000 employees receiving severance, and another 500 positions eliminated through attrition. Most of the cuts will take place in the middle of this year. In addition, the company is cutting 450 contractor positions.
The cuts will result in a one-time charge of between 17 and 19 cents a share in the second quarter to cover the costs associated with the cuts, primarily severance expense.
The cuts are part of the company's plan to trim expenses by $900 million a year by next year. This round of cuts will result in about $325 million in annualized cost savings. The company expects another $375 million in fixed cost cuts by 2005 by reducing spending in areas such as contract services, supplies procurement, telecommunications and information technology expense.
The cuts do not include the company's Invista clothing and carpet fiber business, which it is in the process of selling. The company announced Thursday that the sales price for that unit would be reduced by $200 million to $4.2 billion, due to what it said were complexities of the deal. That sale to Koch Industries is now expected to close by April 30.
"These are difficult but necessary decisions as we align our resources with market needs and adjust the size of our infrastructure following the anticipated separation of Invista," said a statement from DuPont Chairman and CEO Charles Holliday Jr.
Shares of DuPont (DD: Research, Estimates), a component of the Dow Jones industrial average, lost 17 cents to $43.43 in Thursday trading before the Good Friday market holiday.
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