PPG Plans 1,100 Job Losses by Mid-2019
US paints and coatings giant PPG Industries has approved a business restructuring plan to reduce its global cost structure, which will result in the net loss of around 1,100 jobs mid-2019.
The company did not say where the cuts would occur. It currently employs about 47,000 people, with about 18,000 in North America and 15,300 in Europe, Middle East and Africa.
Announced in a regulatory securities filing on Apr. 23, PPG said the plan is in response to a customer assortment change in its US architectural coatings business during the first quarter of 2018 and sustained, elevated raw material inflation.
Most of the restructuring actions are expected to be completed by the end of the second quarter 2019. The Pittsburgh-based company said that as well as headcount, the program aims to right-size production capacity in certain businesses, based on current product demand as well as reductions in various global functional and administrative costs.
A pretax restructuring charge of $80-85 million, based on current exchange rates, will be recorded in PPG's second quarter 2018 financial results, of which about $75-80 million represents employee severance and other cash costs.
PPC anticipates that the plan’s cash payback will be less than two years, adding that it will continue to review its cost structure to identify additional opportunities for cost savings.
Last year, PPG attempted a hostile takeover of Dutch rival AkzoNobel on three separate occasions. Unable to engage Akzo, it agreed in January 2018 to buy Dutch wholesaler ProCoatings for an undisclosed sum. The deal was scheduled to close in the first quarter.
