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Goodyear announces 500 layoffs globally amid cost-saving actions

Goodyear says this decision comes 'in response to a challenging industry environment and cost pressure driven by inflation.'

AKRON, Ohio — Goodyear has announced a reduction of approximately 5% of their salaried staff globally, which the company says is roughly 500 jobs.

Goodyear tells 3News this includes approximately 90 layoffs in Akron, which is where the company is headquartered.

The "planned rationalization and workforce reorganization" was announced Friday morning in what Goodyear is calling cost-saving actions "in response to a challenging industry environment and cost pressure driven by inflation."

“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.”

Akron Mayor Dan Horrigan released the following statement to 3News after the announcement:

"It’s always difficult to hear about layoffs in our community. My thoughts are with the individuals and their families impacted by the recent announcement from Goodyear. Goodyear continues to be a major employer in Akron, employing more than 2,500 people after these layoffs, and they remain invested in our community," said Mayor Horrigan. "We look forward to their continued long-term growth and success as they combat volatile cost inflation and other challenges. My office is committed to Akron's workers and businesses and connecting our residents with great work opportunities right here in our city."

Here is more from Goodyear regarding this decision: 

"Global replacement tire industry demand remained weak in the fourth quarter, led by a 12% decline in EMEA. When coupled with the impacts of inflation — including significant increases in energy costs — the Company expects its EMEA business unit to report a fourth quarter segment operating loss of approximately $80 million. EMEA had reported positive segment operating income since the second quarter of 2020.

"While raw material and certain other input costs have declined recently, the Company seeks to drive efficiencies to help offset inflation in other areas like wages and benefits.

"The rationalization and reorganization are expected to be completed during the first and second quarters with a portion in international businesses subject to required consultation with relevant stakeholders. These actions are in addition to cost synergies related to the integration of Cooper Tire.

"The Company expects to record pre-tax charges associated with these actions of approximately $55 million, primarily relating to cash severance payments that are expected to be substantially paid during the first half of 2023. The rationalization and reorganization will result in a quarterly run-rate benefit of approximately $15 million beginning in the second quarter. Savings in the first quarter are expected to be $5 million.

"These actions follow the Company’s earlier announced plans to close its Melksham, United Kingdom, manufacturing facility and exit its TrenTyre retail operations in South Africa to support EMEA’s overall competitiveness."

Earlier this week, Goodyear announced they would be reporting fourth quarter and full-year 2022 financial results after market close on Wednesday, Feb. 8. The company will then host an investor conference call at 8:30 a.m. on Thursday, Feb. 9.

Goodyear says they employ approximately 72,000 people worldwide with products manufactured at 57 facilities in 23 countries. 

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Editor's note: Video in the player above was originally published in a previous Goodyear story on Dec. 1, 2022.

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