An estimated 1,700 jobs to be affected locally, with 10 percent of the company's 63,000 jobs on the block
Just weeks after the announcement of a massive merger with Dow Chemicals, longtime Delaware industry leader DuPont has announced cuts of up to 1,700 Delaware based jobs.
According to a statement from DuPont Chair and CEO Ed Breen, positions will be eliminated in the beginning of the new year.
Corporate headquarters for the combined, post-merger Specialty Products division will remain in Wilmington, according to Breen.
Breen also vows to “honor” affected employees with separation packages, career placement services and training allowances, the release states.
"I am deeply aware that these decisions affect the lives - and families - of many people," Breen said.
A statement regarding the company’s $700 million restructuring announcement on Dec. 11 said the new deal called for cost reductions across all businesses and staff functions globally, and to further simplify the company’s structure into “fewer, larger businesses with integrated functions.”
The same statement said that $650 million of a projected $780 million in estimated pre-tax earnings accounts for employee separation costs, with an additional $130 million of asset-related charges and contract terminations.
The changes affect roughly 10 percent of DuPont’s 63,000 global workforce.
Gov. Jack Markell called the announcement deeply disappointing, especially to the thousands of Delawareans who helped the company grow and succeed for generations.
“DuPont’s number one asset is its people, and the innovations that the company has produced during its storied history are a testament to the quality of those people,” Markell said. “For those affected by today’s announcement, they should know that the State will do all that it can in the coming months to assist them as they evaluate new opportunities.”
Sen. Chris Coons, who said he feared this day would one day come, called the layoffs "devastating" and "heartbreaking."
He added that, as a member of the Senate Judiciary Committee, he plans to closely scrutinize the proposed merger between the two powerhouse companies.
“I am committed to doing everything possible to help the families impacted by this decision, fight for DuPont pensioners, and ensure that Delaware is in the best possible position to remain the home of DuPont and Dow jobs for years to come,” he said.
Sen. Tom Carper urged government officials to work together to ensure the welfare of those affected by the layoffs.
“We, as the state’s elected officials, can’t sit back, wring our hands and bemoan our fate,” he said. “I will continue to work with the Governor and Congressional delegation to do everything we can to help those affected and make sure good job opportunities are available here in the First State.”
Carper said it’s absolutely critical that the agriculture business division of the new Dow-DuPont company remain headquartered in Delaware.
“The Congressional delegation will work alongside Gov. Markell, the Delaware legislature and business and community leaders to do our part to ensure it is,” Carper said.
Rep. John Carney, D-Del., called the announcement from the 213-year-old company a "punch in the gut" coming as legislators prepare to close out the year.
“This isn't about bottom lines or shareholder value for us – it's about our friends and neighbors whose lives are being turned upside down,” Carney said.
New Castle County Executive Tom Gordon said that while he was encouraged DuPont has committed to basing its Specialty Products business in the state, the plan to cut more than one of every four of its jobs in the state “is very discouraging.”
Gordon also said that the merger is now "being run by the investment bankers” without concern for the impact on the state and people who made the company great.
“I think they’re going to leave us with all the costs and pollution,” he said.
New Castle County Councilman Tim Sheldon, 9th District, said he was saddened by what was one of last of the “big, old companies” where one was hired out of high school, and worked their job through to retirement.
He added that in most cases, massive layoffs at a single company have a cascade effect that sends ripples through what he said was still an unstable economy.
“It winds up being a lot bigger than what people think,” he said.
Sheldon also said he believed that now more than ever, New Castle County should make more inroads in helping with economic development.
“Not through money but through regulation and helping employers do whatever they need to do … we’re trying now, but I think it’s got to be a focus,” he said.
State Sen. Greg Lavelle said the change is difficult news for many families in the 4th District and throughout the state.
“These families are our neighbors and our friends, and today’s decision will impact our community tremendously,” he said.
On Sunday, the Philadelphia Inquirer noted that shares of both Dow and DuPont have slipped in the weeks following the merger announcement, as the two companies worked through changes to corporate divisions.
Work is expected to stop on a 134,000-square-foot soybean research center in Newark, originally expected to be completed in 2016, that cost DuPont roughly $35 million.
The company also announced the closure of a 75,000-square-foot biofuel demonstration facility in Vonore, Tenn., that opened its doors five years ago. According to the Knoxville News Sentinel, the plant is to close by the end of 2015.