Akron-based Goodyear Tire & Rubber company announced Friday that it will be making layoffs.
In a statement, the company said industry demand dropped, particularly overseas, toward the end of its fiscal year. It also pointed to inflation and rising cost of materials as a reason for cutting costs in the form of wages and benefits.
Goodyear will cut about five-percent of its salaried staff globally – about 500 people. These layoffs are expected to be made in the first and second quarter of its fiscal year. Goodyear did not indicate where those cuts would happen, whether it be staff in Ohio or beyond.
The company expects to pay approximately $55 million in pre-tax charges related to the layoffs – primarily in cash severance payments that are expected to be paid in the first half of 2023. Goodyear predicts the move will result in a quarterly benefit of approximately $15 million beginning in the second quarter. It expects $5 million of savings in the first quarter.
Goodyear said it expects its EMEA (Europe, Middle East and Africa) operations to report a fourth quarter operating loss of about $80 million.
“Our fourth quarter results fell short of our expectations given a significantly weaker industry backdrop, particularly in Europe,” said Richard J. Kramer, chairman, chief executive officer and president. “While our businesses have performed at a high level through the volatility of the past several years, the uncertain near-term macroeconomic outlook and continuing impacts of inflation make these difficult actions necessary to position our business for future success.”
Goodyear also recently announced it would be closing a manufacturing facility in the United Kingdom and that it would eliminate some retail operations in South Africa.
The company employs 72,000 people in facilities in 23 countries.
Goodyear will provide financial results for the end of its fiscal year on Feb. 8 and will have an investor conference call on Feb. 9.
