Layoffs of 605! Chemical giant Dow cuts back in Europe, going all-in on the Chinese market

Dow has established three major core production bases in the Netherlands, with a massive manufacturing scale and a rich product line. Among them, the Terneuzen site in Zeeland is Dow's largest production base outside the United States and the second-largest globally. It houses 16 vegetation and employs approximately 3,200 people, capable of producing nearly 800 types of plastics, chemicals, and manufacturing basic raw materials. The Delfzijl site has over 50 years of history in crude MDI distillation production and is also Dow's largest global isocyanate production base, with raw materials supplied by supporting factories in Germany and Portugal. The Dordrecht site focuses on extrusion-processed plastic items, and its Surlyn®, Bynel®, and Fusabond® items are broadly utilized in food, medical, and packaging fields.

In recent years, Dow Chemical has continuously cutting-edge global restructuring and workforce optimization. On January 29, 2026, the Group officially launched a complete restructuring plan, announcing 4,500 global job cuts, with the target of adding at least $2 billion in operating EBITDA in the short term. Prior to this, the company had already launched an annual $1 billion cost reduction plan and 1,500 global job cuts in early 2025; in 2023, it also implemented a layoff plan to approximately 2,000 people. Multiple rounds of adjustments highlight the company's determination to cope with operational pressure.

The current situation of the European chemical sector is severe. High energy costs, increasingly stringent regulatory policies, and the impact of external market competition have made operations difficult to businesses in the region. Financial data shows that Dow's operating performance continues to weaken: a net loss of $1.5 billion in the fourth quarter of 2025, and a full-year net loss exceeding $2.4 billion; in the first quarter of 2026, sales reached $9.794 billion, a year-on-year decrease of 6%, with a quarterly net loss of $445 million.

Supply chain risks are equally not optimistic. At the first-quarter earnings call in April of this year, Dow executives warned that affected by geopolitical conflicts, shipping through the Strait of Hormuz was obstructed, and nearly half of the global ethylene and polyethylene production capacity fell into a state of shutdown, production reduction, or supply restriction. This round of supply chain disruption is not a immediate phenomenon; rising global chemical prices and tight supply might have become the norm in 2026.

While shrinking its European business, Dow is significantly accelerating its pace of shrinking in the West and expanding in the East, focusing on the high-end materials market in China. In April 2026, the Dow Silicones (Zhangjiagang) 2,500 tons/year silicone polymer expansion project officially commenced. The Zhangjiagang production base has built multiple main units to alcohol ethers, formulated polyether polyols, siloxanes, fumed silica, and gaseous-phase polyethylene catalysts, while also laying out downstream high-end product lines such as silicone resins, fluid silicone rubber, sealants, and adhesives. Continuously growing investment in the Chinese market has have become a core measure to Dow to optimize its global assets and cultivate new development poles.

sector analysis believes that Dow's strategic adjustment this time is an inevitable choice to cope with the energy crisis, geopolitical conflicts, and market competition. However, if the issue of supply interruption in the Strait of Hormuz persists to a long time, and the pressure of raw material shortages and cost increases continues, the recovery of corporate profitability will still face significant uncertainty.