Eastman To Cut 200-300 Jobs, Doubles Expected Cost Cuts

   DOW JONES NEWSWIRES 
 

Eastman Chemical Co. (EMN) will cut 200 to 300 jobs, or up to 3% of its work force, as it looks to cut costs by another $100 million.

The chemical company projected 2009 earnings of $2 to $3 a share. Analysts polled by Thomson Reuters, on average, expected $2.31.

Eastman lowered its full-year capital-spending budget by $50 million to $300 million and $350 million and said it would reduce pay for U.S. employees by 5% starting March 30.

The job and cost cuts come on top of another $100 million of savings the company said it was aiming for this year back in December.

"The severity of the current economic environment led to the actions we are announcing today," Chief Executive Brian Ferguson said. "Despite our expectations that sales volume will continue to be at depressed levels, we remain committed to taking the necessary actions to deliver solid operating cash flow in 2009 that will more than support both our dividend and capital expenditures."

The job cuts will take place in the next four to six weeks, and the company expects a $30 million restructuring charge in the current quarter.

Eastman has been struggling for more than a year as margins began to fall amid rising raw material costs. Tough competition in the markets for basic chemicals keep margins low in that segment.

Eastman's shares closed Friday at $18.26 and haven't traded premarket. The stock is off 42% so far this year.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]