Chemical Industry Faces Another Year of Deep Cutbacks as Major Producers Slash Thousands of Jobs

What's Happening

The global chemical industry is bracing for another round of deep cost cuts in 2026, following a year in which major producers reported steep earnings declines, plant closures, and tens of thousands of job eliminations. According to C&EN's analysis of fourth-quarter earnings, the downturn that began in late 2022 has shown few signs of easing.

BASF CEO Markus Kamieth described 2025 as "an uncertain and very volatile global market environment with considerable headwinds." That assessment was echoed across boardrooms from Houston to Ludwigshafen, as company after company disclosed declining sales, margin pressure, and accelerated restructuring.

Who's Cutting and How Deep

BASF, the world's largest chemical maker, saw sales decline 2.9% and earnings drop 38.8% in 2025. The company has cut $2 billion in annual costs since 2023 and plans to push that to $2.7 billion by the end of 2026. BASF eliminated 11% of its senior executives and reduced its global workforce by 4,800 workers. It also sold its majority stake in its coatings business to Carlyle and Qatar Investment Authority.

Dow Chemical reported a $657 million loss in January 2026. On top of a prior 1,500-job streamlining program, Dow announced an additional 4,500 job cuts as part of a $2 billion cost reduction effort.

Eastman Chemical saw sales decline 6.7% and earnings drop 32.7%. CEO Mark Costa observed that, excluding data centers, AI, and healthcare, "GDP is sort of flat" and "eighty percent of our consumers out there are really struggling with the economic challenges." Eastman cut $100 million in 2025 costs and plans $125-150 million more in 2026.

Solvay shed $235 million in annual costs over two years, closing peroxides plants in the UK and Portugal and shutting a trifluoroacetic acid unit in France. Sales fell 9.0% and earnings dropped 31.2%.

Celanese earnings dropped 51.1% as automotive and construction markets stayed weak. The company sold its Micromax inks business for $500 million and is targeting $1 billion in total divestitures.

LyondellBasell saw the steepest earnings decline: down 72.4%, with sales off 9.7%.

DuPont was a rare bright spot, with sales up 1.9% and profits up 31.2%, buoyed by strong demand in healthcare and water markets.

Why It Matters for Chemical Buyers

When major producers close plants, shed product lines, and slow production, the effects ripple through the supply chain. Chemical distributors and end users should watch for:

• Longer lead times on commodity chemicals as capacity comes offline
• Product discontinuations as companies exit non-core lines
• Pricing volatility as reduced supply meets uneven demand
• Shifts in sourcing as producers divest or consolidate operations

The trend is particularly acute in basic chemicals and polymers. Companies like Solvay and LyondellBasell are pulling back from commodity production, which could tighten supply for solvents, peroxides, and base chemicals that many industrial buyers depend on.

What to Watch in 2026

Companies across the sector have signaled that 2026 will bring continued restructuring. BASF has further cuts planned. Dow's $2 billion savings target is only partially realized. Celanese is actively marketing assets for sale.

Buyers who depend on a single supplier for critical chemicals should consider diversifying their sourcing. With producers exiting product lines and closing facilities, the companies that maintained lean operations and diversified supply chains will be best positioned to weather continued disruption.