Chemical company Dow has announced “a series of aggressive actions to accelerate its transformational strategy in light of current economic realities”. For those baffled by this new low in corporate speak: it is laying off thousands of employees after being credit crunched.

Dow is closing 20 facilities in what it calls “high-cost locations” and will shed 5,000 employees, around 11% of its total workforce, as part of a $700 million annual cost saving (press release).

Andrew Liveris, the company’s chairman and CEO, told a conference call Dow was also “temporarily idling” around 180 production plants, 30% of its total. This will mean a reduction in contractor numbers of around 6,000.

Just in case he hadn’t used enough jargon, Liveris added “Today’s restructuring is designed to support the Dow of Tomorrow. However, we are accelerating the implementation of these measures as the current world economy has deteriorated sharply, and we must adjust ourselves to the severity of this downturn.”

Reaction below the fold.

Bloomberg points out the announcement has gone down well with the markets:

Dow Chemical Co., the largest U.S. chemical maker, rose the most in more than a month in New York trading after announcing plans to eliminate 11 percent of its workforce, close plants and sell businesses.

Dow soared $1.37, or 7.2 percent, to $20.37 at 4:15 p.m. in New York Stock Exchange composite trading. The gain was the largest since Oct. 28. Still, the Midland, Michigan-based company’s shares have fallen 48 percent this year.

The NY Times notes that it’s not just Dow:

Its rival DuPont said last week that it would cut 2,500 jobs and eliminate 4,000 contractors. It also said it would idle 100 manufacturing units and warned that it would not make a profit in the fourth quarter because of a slowdown in the automotive and construction markets.

Chemical and Engineering News says:

The layoffs by Dow and DuPont will contribute to mounting unemployment in the U.S. manufacturing sector. On Dec. 5, the Department of Labor reported that U.S. unemployment rose 0.2% to 6.7% in November, the highest level in 15 years. Nonfarm payroll fell sharply by 533,000 jobs, of which 85,000 came from manufacturing.