Hello, this is the ISOL trend analysis team.
As the new year begins, somewhat heavy news is being reported in the global chemical industry. Companies representing the chemical industry, such as Dow Chemical, BASF, and Covestro, have announced large-scale workforce reduction plans one after another, leading to a widespread perception that the entire industry has entered a quiet restructuring phase.
Dow Chemical recently announced an additional workforce reduction of about 4,500 employees. Having already undergone two rounds of restructuring in the past few years, the cumulative number of job cuts has expanded to about 8,000. BASF is also considering a workforce reduction of about 6,000 by 2026, and Covestro has indicated an organizational slimming of about 2,000 employees. This is significant not as a one-time decision by specific companies, but as a simultaneous adjustment in direction across the global chemical industry.
The background of these movements lies in common changes in the industrial environment. Global demand recovery remains slow, and the burden of energy and raw material costs is maintained at higher levels than in the past. Additionally, the oversupply structure centered around China, geopolitical risks, and strengthening environmental regulations are putting structural pressure on the profitability of chemical companies.
Particularly noteworthy is that this restructuring appears to be an attempt to change the very way the industry operates, beyond just cost reduction. Dow Chemical has clearly mentioned the introduction of artificial intelligence and automation technology alongside workforce reductions, suggesting a shift from a people-centered operational structure to a process and system-centered structure. BASF and Covestro are also moving towards streamlining inefficient assets and organizations, and strengthening their focus and selection strategies.
The ISOL trend analysis team interprets this flow not as a response to a short-term recession, but as a process of structural transition in the global chemical industry. It has become difficult to maintain competitiveness solely through strategies focused on scale expansion and volume, and it is now seen as necessary to consider profitability, process efficiency, and carbon response capabilities simultaneously. In this process, workforce restructuring is emerging as an inevitable choice.
These changes are likely to have indirect effects on the Korean market as well. Adjustments in investment priorities and organizational reductions by global majors could lead to changes in supply strategies for certain product groups, and may also connect to a reassessment of the Asian market. Particularly, since Korea is a market with high technological responsiveness and customer proximity, it cannot be ruled out that global companies may selectively refocus their attention here.
The ongoing news of job cuts is not just a matter of numbers, but rather a signal that the chemical industry is moving into a new phase. Adjustments to create a more efficient structure with fewer resources are becoming more pronounced. While it is still uncertain what the results of this transition will look like, it is clear that the global chemical industry is being reshaped in ways that differ from the past.