DD DuPont de Nemours Inc

DuPont Co. plans to cut 1,700 jobs in its home state of Delaware as the agriculture-and-chemical giant pursues $700 million in cost savings ahead of its planned merger with Dow Chemical Co.

In a letter to DuPont staff on Tuesday, Chief Executive Ed Breen also sought to soften the holiday blow, announcing that Wilmington, its hometown of 213 years, will be the headquarters of one of three planned spinoffs following the Dow tie-up.

The layoffs, which represent nearly a quarter of DuPont's roughly 7,000 employees in Delaware, come as DuPont consolidates some of its scientific research operations and moves corporate functions to other locations that are closer to its customers, Mr. Breen said.

"The effect in Delaware will be significant, reflecting the urgent need to restructure our cost base and, as part of that effort, reduce our corporate overhead costs so that we can remain competitive," he wrote. Delaware state law required DuPont to file a notice of the layoff plans by Dec. 31, forcing the company to outline it publicly before all affected individual employees were told the news, Mr. Breen wrote.

Under DuPont's deal with longtime rival Dow, the pair plan to strip out $3 billion in annual costs from the combined company before it splits into three separate businesses, focused on agriculture, industrial materials and specialty products including food ingredients and electronic components. Those planned cuts are on top of the $700 million in annual savings DuPont is seeking before the merger.

Mr. Breen wrote that the specialty products company—which will produce food ingredients, bullet-resistant fibers and solar-panel components—will be based in Wilmington.

A. Richard Heffron, president of the Delaware State Chamber of Commerce, said the news was a blow but not a total surprise given DuPont's stepped-up efforts to cut costs in recent years, as the company's profits suffered from a rising U.S. dollar and slumping commodity prices.

"DuPont was Delaware," said Mr. Heffron, who welcomed the news that one of the spinoff companies would remain in Wilmington. "On the other hand the world's changing, and you've got to adapt to the changes."

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

December 29, 2015 13:05 ET (18:05 GMT)

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