The company, which is a key global provider of silicone-based products for the personal care segment, is pointing to a slowdown in its business, which also serves industries hard-hit by the economic downturn such as construction, aerospace and packaging.
Although the personal care segment is likely to be one of the company’s stronger performing divisions, the overall picture is looking challenging - a situation that has forced the company to step up cost saving and restructuring measures that were already under way.
Job losses hit 9 percent of workforce
The job redundancies represent an approximately 9 percent reduction in the company’s workforce as it stood at the start of this year, action that will cost the company approximately $15m in charges during the last quarter of 2008 and the first quarter of 2009.
The company also said that for all US salaried employees, the company is eliminating merit pay increases for 2009, as well as suspending payments to related employee savings and tuition schemes.
Similar cost saving initiatives will also be implemented for the company’s other operations worldwide, which center on the Asia Pacific and European markets.
“As we end 2008 and look toward next year, we are facing unprecedented challenges related to the current global economic slowdown,” said Jon Rich, the company’s CEO and president.
Looking to the year ahead Rich said that the company would consider further restructuring steps as a means of protecting the company and maintaining its market position.
Momentive provides a range of silicones for personal care products that are designed to help bring about a smoother texture for hair care and skin care products. They are also used to make drier antiperspirants, smoother UV sunscreens, and help make topical cosmetics more spreadable.
Innovation and new ingredients
Earlier this year the company announced plans to build a new innovations center in New York in an effort to maintain its edge in a highly competitive market.
And earlier in the year the company unveiled its new multipurpose ingredient Velvesil FX.
Produced in a gel form, the formulation combines the company's expertise in the fields of both silicones and boron nitride chemistries to produce significant improvements in spreadability and processability, claimed the company.