20th May 2018

PPG TO CUT JOBS IN RESTRUCTURING

Global coatings manufacturer PPG will be cutting over 1,000 jobs in a restructuring effort that follows on rising raw-material costs and the loss of the company’s consumer brands listing from Lowe's home-improvement stores.

The projected layoffs were reported in a filing made to the US Securities and Exchange Commission, which notes that a pretax restructuring charge of $80 to 85-million will be recorded in the company’s second-quarter financial report. Most of that charge will go to employee severance and other cash costs, the filing says. About 1,100 employees are expected to lose jobs.

The company has not yet indicated where the job cuts will occur, but said in the SEC filing that the move was brought on by “a customer assortment change in our US architectural coatings business” as well as “sustained, elevated raw material inflation.” PPG’s Olympic paints and stains were removed from Lowe’s stores in the first quarter of this year when the home-improvement giant signed a deal with the Sherwin-Williams Co.

PPG has, however, announced a new deal it had made with Home Depot, a  competitor of Lowe's and the largest home-improvement retailer in North America, whereby Lowe's will sell Olympic products.

The layoffs will occur between now and the second quarter of 2019, according to PPG, and the company expects the restructuring to begin to pay off within two years. The company “continues to review its cost structure to identify additional cost savings opportunities,” according to the SEC filing.

The news follows the company’s first quarter 2018 earnings report which indicated an increase in net sales over the previous year, but also reported rising material costs.

www.ppg.com