Ashland to cut expenses by $75 million, eliminating 500 jobs

Ashland Inc., Covington, Ky., announced plans to reduce expenses by $75 million in fiscal 2004. This amount is in addition to $25 million in savings achieved from a previously announced program in fiscal 2003.

Oct. 1, 2003

2 min read

By OGJ editors
HOUSTON, Oct. 1 -- Ashland Inc., Covington, Ky., announced plans to reduce expenses by $75 million in fiscal 2004. This amount is in addition to $25 million in savings achieved from a previously announced program in fiscal 2003.

Ashland Chairman and Chief Executive Officer James J. O'Brien said, "Reducing our costs is a pivotal part of our strategy to produce top-quartile results relative to our peers. Becoming a low-cost, operationally excellent organization is critical to serving our customers, enhancing our financial strength, and restoring our ability to grow."

The program will eliminate 500 jobs in Ashland's wholly owned businesses and corporate resource groups, and 80% of the reductions will be completed before Nov. 30.

Ashland expects to record $18 million in before-tax charges in the September quarter for severance and other costs related to the personnel changes.

O'Brien noted that Ashland eliminated 200 jobs earlier and recorded $8 million in severance and related costs in earlier periods. When added to the 500 positions currently being eliminated, the combined total of 700 jobs equals 7% of Ashland's salaried employees.

Ashland is examining additional cost reductions that may be available through a realignment of activities across the corporation and outsourcing, he said. Estimates of potential savings and transition charges have not yet been made.