PPG Industries to Lay Off 1,800 Employees Amid Cost-Cutting Measures

PPG Industries plans to lay off approximately 1,800 employees as part of its ongoing efforts to reduce costs and streamline operations. The Pittsburgh-based paints and coatings manufacturer also announced a deal to sell a significant portion of its architectural business, which includes well-known brands such as Liquid Nails, Glidden, and Olympic.

The layoffs will primarily affect positions in the U.S. and Europe, although the exact timing has not been disclosed. According to PPG’s chairman and CEO, Tim Knavish, the job cuts are a part of a broader multiyear program aimed at reducing the company’s fixed cost base and right-sizing its operations. This initiative will also involve the closure of various facilities, although specific details were not provided.

In conjunction with the layoffs, PPG has agreed to sell its U.S. and Canadian architectural coatings business to the private equity firm American Industrial Partners (AIP) for $550 million. This segment generated $2 billion in net sales for PPG last year and is expected to close in late 2024 or early 2025. Additionally, PPG is in the process of selling its silicas products business to Poland-based QEMETICA S.A. for approximately $310 million.

These announcements follow a disappointing earnings report for PPG, which revealed a third-quarter net income of $468 million, or $2.13 per share, on revenue of $4.58 billion—results that fell short of Wall Street expectations. The current economic climate, characterized by poor home sales and rising mortgage rates, has added to the challenges faced by the company. Existing U.S. home sales dropped 2.5% in August, as prices have continued to increase for the 14th consecutive month.

Both PPG and AIP have expressed optimism regarding the recent agreement. Rick Hoffman, a partner at AIP, commented on their excitement about acquiring a legacy business, while Knavish highlighted the strategic benefits of these divestitures in optimizing PPG’s portfolio and focusing on stronger growth areas.

Key Takeaways:

• PPG Industries will lay off about 1,800 employees as part of a cost-cutting initiative.
• The company is selling its U.S. and Canadian architectural coatings business for $550 million.
• PPG’s third-quarter earnings report fell short of expectations amid poor home sales and rising mortgage rates.
• The layoffs and divestitures are part of a multiyear program to right-size the company.

In conclusion, PPG Industries’ decision to lay off employees and divest parts of its business highlights the company’s response to current economic challenges. As the housing market continues to face pressure, these strategic moves may help PPG optimize its operations and focus on areas with greater growth potential.