NEW YORK -- Shares of Dow Chemical Co. jumped Wednesday after the manufacturing giant said it will close some 20 manufacturing facilities and eliminate 2,400 jobs in an effort to cut costs in the slow global economy.
Dow made the announcement late Tuesday, just hours after The DuPont Co. unveiled a similar plan with some 1,500 job cuts and other measures aimed at saving money.
It's a stark reminder of how U.S. companies are struggling because of weak demand as Europe wrestles with its years-old debt crisis and China works to turn around its deepest slowdown since the 2008 global crisis.
And the cuts may not be over for chemical manufacturers. They are analyzing their portfolios of assets to determine which are the most cost efficient and competitive. Those that have higher costs could be cut or closed, Argus Research analyst Bill Selesky said.
"I think everything is kind of ongoing because the economy is a lot less robust than anybody is really figuring at this point," he said.
Chemical giants like Dow and DuPont produce materials used by nearly every business sector around the world, from energy and agriculture to construction. They also manufacture materials for a variety of consumer products such as electronics, packaging and paints.
Dow Chemical said the job cuts will amount to about 5 percent of its worldwide workforce. The company anticipates saving $2.5 billion with the plant closures and other cost-cutting measures.
The announcement was made as Dow Chemical said its third-quarter net income dropped nearly 40 percent to $497 million, or 42 cents per share. Net income totaled $815 million, or 69 cents per share, in the year-ago quarter. Revenue dropped 10 percent to $13.64 billion.
DuPont said it will eliminate 1,500 jobs, or about 2 percent of its workforce, over the next 18 months. DuPont also will lose an additional 11,000 jobs when the sale of its performance coating division to private equity firm The Carlyle Group is final.
DuPont also identified more cost-cutting measures. It expects to save about $450 million before taxes.
In afternoon trading, shares of Dow Chemical rose $1.59, or 5.6 percent, to $30.14.
Other chemical manufacturers were mixed. DuPont fell 31 cents to $44.94. Celanese Corp. rose 51 cents to $38.70.