Dow Chemical has announced it will slash around 1,500-1,750 jobs, up to 3% of its global workforce, as part of a plan to reduce costs by $1 billion over three years.

The US chemical giant said the job cuts are part of the $5 billion deal to separate a significant part of its chlor-alkali and derivatives businesses and sell them with Olin.

Planned to be completed over the next two years, the layoffs will go hand in hand with consolidation or closure of production facilities representing less than 1% of the company's net property value, which Dow called "minor footprint adjustments."

The measures are expected to save $300 million in operating costs annually.

Dow said it would take charges of about $330-$380 million in the second quarter for asset impairments, severance and other costs.

"At our Investor Day last fall, we committed to a new, three-year $1 billion productivity drive," Dow CFO Howard Ungerleider said. "Our productivity efforts continue to center on cost-out actions and doing more with the resources we have in place, all to enable higher earnings."

The job cuts and facility closures "illustrate our ongoing commitment to the consistent implementation of our strategy moving forward and proactively address any stranded costs from the divestment of Dow Chlorine Products," Ungerleider added.

Annual revenue of the combined Dow and Olin business is expected to be around $7 billion, with EBITDA targeted at $1 billion on a 2014 pro forma basis, excluding synergies.