Hercules Inc. to fire 3% of work force

At least 300 cuts in all, with most of them in U.S.

September 06, 2001|By BLOOMBERG NEWS

WILMINGTON, Del. - Hercules Inc., a top producer of paper-making chemicals, said yesterday that it will fire at least 300 workers, or 3 percent of its work force, as part of a plan to save $100 million a year.

The job cuts are mostly in the United States, with fewer reductions in South America and Asia. They will occur by Sept. 30.

Separate job cuts affecting about 3 percent of the company's European work force may be announced soon, a company spokesman said. Europe accounts for about a fourth of Hercules' 9,600 employees, while about half work in the United States.

An undisclosed number of contract workers will also be fired.

The cuts are part of a cost-cutting program announced in June that would save $100 million annually starting the end of the second quarter of 2002. The company has been under pressure for the past year from its largest shareholder, Samuel Heyman, to reduce costs and consider selling all or part of the company.

The job reductions come after Hercules, which is exploring a sale, said Aug. 2 it had a second-quarter operating loss of $1 million. The results were below analyst estimates as sales fell 18 percent.

Heyman and his company, International Specialty Products Inc., hold 9.9 percent of Hercules' shares, and he was successful in getting himself and three others elected to Hercules' board this year. Heyman has said he would pressure Hercules to reduce expenses.

Spokesman John Riley said the cost-reduction plan was initiated by Chief Executive Officer William Joyce, who joined the company in May after overseeing the sale of Union Carbide Corp. to Dow Chemical Co.

Shares of Wilmington, Del.-based Hercules rose 16 cents to $11.36.

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