KINGSPORT, Tenn. (WJHL) — Eastman Chemical Company plans to reduce its global workforce by the end of the year, the company confirmed Thursday to News Channel 11.
Eastman said it has informed employees that it is taking action to improve efficiency and competitiveness.
The company’s second-quarter earnings report, released early this month, showed net earnings of just $30 million, down from $259 million in the second quarter of 2019.
Eastman said in that report that it had executed $60 million in cost cutting measures in the first six months of 2020 and predicted another $90 million in the latter half of this year.
The report noted that Eastman’s focus in the April-June quarter, when its sales were down $439 million, or 19 percent compared to the previous year, was on “maximizing cash generation.”
Through June 30, net earnings were down 38 percent, from $468 million in 2019 to $290 million this year. That was after a first quarter in which earnings were actually up year on year.
The 10-Q report noted Eastman’s “cost reduction actions” include reduced discretionary spending, deferred asset maintenance turnarounds, “and adjusted operations to ensure the health and safety of employees and contractors.”
The report projected that management would see Eastman through to free cash flow of greater than $1 billion through the year and reduce net debt by more than $600 million.
The company has also withdrawn its previous earnings and cash flow forecasts from its 2019 annual report. That report forecast debt reduction of more than $400 million (not $600 million) and earnings per share of between $7.20 and $7.60 for the full year.
Eastman’s earnings per share in the second quarter were just 20 cents and are at $2.09 cents through the first half of the year, compared to $3.34 last year. The company ended 2019 with EPS of $5.52.
“Eastman, like so many other companies in our industry, is operating in a very difficult environment, which has been further compounded by the current COVID-19 pandemic,” a company spokesperson said in a statement. “As part of our efforts to continue to optimize our organizational structure and operating model, we have informed employees that the company is taking actions that will make our operations more efficient and effective and improve our competitiveness.”
As a result of those actions, the company said it will be reducing its global workforce by the end of the year.
Eastman said it could not release any further details as the company is still planning those changes.