Goodyear to cut 500 jobs after fourth quarter reverses

Akron, Ohio – Goodyear Tire & Rubber Co. is cutting 5% of its global workforce, or 500 positions, under a programme to cut costs by $15 million (€14 million) per quarter.

The plan, which kicks in in the second quarter, is in response a disappointing fourth quarter and “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,” explained Richard Kramer, chairman, CEO and president.

The “uncertain near-term macroeconomic outlook” and continuing impacts of inflation have made the rationalisation programme necessary, Kramer added in a 27 Jan announcement.

Goodyear did not disclose further details of the cost-saving scheme, but indicated that there would an “international portion” which required consultation with relevant stakeholders.

The Akron-based group went on to note that global replacement tire demand remained weak in the final quarter, led by a 12% decline in Europe, Middle East and Africa (EMEA).

Coupled with the impacts of inflation — including significant increases in energy costs — Goodyear expects its EMEA business unit to report a fourth quarter segment operating loss of $80 million.

This marks a significant reversal for Goodyear’s EMEA business, which had reported positive operating income since the second quarter of 2020.

While raw material and certain other input costs have declined recently, Goodyear pointed to a need for efficiencies to offset inflation in areas such as pay and benefits.

Goodyear expects to record pre-tax charges associated with severance payments and other cost-reduction measures of $55 million.

The group will report fourth quarter and full-year 2022 financial results 8 Feb.