In 2026, the plasticizing industry is facing a profound reshuffle and drastic adjustments. With imbalanced market supply and demand, high costs, overcapacity, and sluggish global demand, the industry as a whole has entered a cold winter. Since the start of the year, a wave of layoffs and shutdowns has swept through the entire industrial chain.

Dow Chemical announced a global layoff of 4,500 employees; BASF launched global staff optimization and subsidiary restructuring; several major European companies have successively shut down ethylene cracking and polyolefin plants, with a cumulative production capacity closure of over 37 million tons in four years.

In 2026, a number of leading enterprises have successively launched layoffs, cost reduction, and production line closures. The wave of layoffs has spread from upstream raw materials to downstream products, and even leading companies have not been spared. Next, I will take you through them one by one, helping you see the real ups and downs of the industry and understand survival and transformation in this cycle.

The 2026 wave of layoffs is coming,

These international chemical giants have taken the most concentrated actions

Let's start with the top tier of the global chemical industry. The continuous layoffs at Dow Chemical are the most intuitive reflection of the industry's pressure.

On January 29, 2026, Dow announced a comprehensive plan - "Transform to Outperform", which aims to simplify the operating model, optimize end-to-end processes, reshape the cost structure and modernize customer service methods.

The goal of this plan is to achieve an operating earnings before interest, taxes, depreciation and amortization (Op. EBITDA) growth of at least $2 billion in the short term. The company expects that the "Transform to Outperform" plan will incur one-time costs of approximately $1.1 billion to $1.5 billion, including severance costs for about 4,500 Dow employees (approximately $600 million to $800 million) and other one-time costs of approximately $500 million to $700 million.

It is worth noting that earlier, at the beginning of 2025, Dow Chemical announced that in order to cope with the ongoing uncertainty in the macroeconomy and enhance the company's long-term competitiveness, it would implement two measures: reducing capital expenditures and laying off employees, to save approximately $1 billion in costs annually, and planned to lay off 1,500 people worldwide. Going further back, in January 2023, Dow Chemical also announced that it would lay off about 2,000 people.

Dow is not an isolated case. BASF, another global chemical giant, is also advancing strategic adjustments aimed at streamlining operations and focusing on core businesses simultaneously.

On January 28, 2026, BASF announced plans to open a global digital center in Hyderabad, India, in the first quarter of 2026. This move will further strengthen its existing global network of digital centers in Europe (Ludwigshafen and Madrid) and the Asia-Pacific region (Kuala Lumpur).

Meanwhile, BASF is advancing plans to reduce operational complexity and costs, as well as adjust its organizational structure. By 2030, the global digital services department plans to significantly reduce its workforce on a global scale, including positions in Ludwigshafen. Additionally, the department also plans to reduce the total number of work locations for digital experts.

Two days prior to this, on January 26, BASF announced that it was conducting a strategic review of its subsidiary trinamiX GmbH, focusing on restructuring, cost-effectiveness, and value optimization, with strategic measures potentially including the sale of some business areas.

These businesses are not BASF's core businesses, and BASF is focusing on its core businesses to implement its new "Winning Ways" strategy announced in September 2024. In addition, BASF completed the sale of its Brazilian decorative coatings, WintershallDea's exploration and production business, food and health functional ingredients, optical brighteners and other businesses in 2025.

In the context of the industry winter, some enterprises are even facing the bankruptcy and shutdown of their subsidiaries, and Domo Chemicals is the latest example.

On January 6, 2026, according to relevant reports, Domo Chemicals Group has suspended spot deliveries from its production base in Germany after filing for bankruptcy.

Previously, on December 29, 2025, three German subsidiaries of Domo Chemicals, namely Domo Chemicals GmbH, Domo Caproleuna GmbH, and Domo Engineering Plastics GmbH, had filed for bankruptcy.

This decision will affect approximately 585 employees, including 515 employees at the Leuna plant in Germany and 70 employees at the Premnit Domo engineering plastics plant in Germany. A company spokesperson stated that employees' salaries will be guaranteed through bankruptcy protection measures until the end of March.

In addition to traditional chemical giants, the adjustments of multinational companies' production lines in China have also attracted much attention, with the move of LG Display being a typical example.

In October 2025, there was news in the market that LG Display (LGD for short) planned to sell its factory. No external consultants were brought in during the internal negotiation and promotion process, and the estimated sales amount reached hundreds of billions of won. From the end of 2025 to the beginning of 2026, the full staff dissolution procedure was officially initiated.

LG Display, a leading South Korean display panel giant, has launched a full staff layoff plan at its wholly-owned module factory, a subsidiary located in Yantai, Shandong. This affects over 1,000 employees and implements an "N+1" compensation scheme. This move is regarded as a crucial step for LGD to accelerate its withdrawal from China's LCD business. Its subsequent arrangements, such as transferring equipment to Vietnam and selling factories, have become a typical epitome of the global display panel industry's transformation from LCD to OLED.

As of January 2026, the factory premises have been cleared and there is no sign of resumption of work. Regarding employee compensation, the actual standards vary from 1.65N to 1.8N based on years of service. Ordinary employees with ten years of service will receive approximately 60,000 to 70,000 yuan in compensation, and technical backbones can receive up to 120,000 yuan. At present, the employee placement work has been fully completed.

Global chemical giants collectively "shrink

In 2025, the chemical industry is undergoing unprecedented structural changes. Under the superimposition of multiple pressures, many leading enterprises have scaled back through measures such as shutting down production capacity, selling assets, laying off employees, and reducing positions.

Giants such as Huntsman, Celanese, INEOS, Covestro, SABIC, LyondellBasell, Arkema, Westlake Chemical, and TotalEnergies have successively downsized or optimized their European operations, involving various chemical products such as ethylene, polyurethane, carbon fiber, aramid, vinyl acetate monomer (VAM), propylene oxide, phenol, acetone, liquid epoxy resin, and coatings.

The performance of the European chemical industry is even more disastrous.

If the global chemical industry is struggling to survive in a cold winter, then Europe is undoubtedly the hardest-hit region in this round of contraction, and official data can better illustrate the problem.

According to a report released by the European Chemical Industry Council (Cefic) on January 28, 2026, the closed capacity of Europe's chemical industry surged sixfold between 2022 and 2025. Over these four years, the cumulative loss of capacity reached 37 million tons, accounting for approximately 9% of Europe's total chemical capacity, resulting in 20,000 direct job losses.

At the same time, new investments and capital expenditures have decreased significantly, which indicates that industry insiders are increasingly worried about the competitiveness and long-term viability of the European chemical industry.

From a segmented perspective, this round of shutdowns is not a local phenomenon but covers all categories from basic raw materials to specialty chemicals. By industry, the upstream petrochemical industry has seen a 14% reduction in production capacity, with the shut-down capacity reaching 17.8 million tons, accounting for 48%; followed by the basic inorganic chemicals sector, where the shut-down capacity amounts to 11.7 million tons, accounting for 32%; the polymer industry has shut down 5.4 million tons of capacity, accounting for 15%; and the specialty chemicals industry has shut down 2 million tons of capacity, accounting for 5%.

The profound contraction of Europe's chemical industry is by no means a localized sectoral issue, but a matter that concerns the very foundation of the entire manufacturing industry. The chemical industry is the root of industry and the basis of manufacturing. Its contraction is not just a cooling down in a single field, but will trigger a chain reaction across the entire industrial chain. Core industries such as automotive, electronics, building materials, and equipment manufacturing are all rooted in the chemical industry system. Once the supply of basic chemicals tightens and costs remain high, the entire manufacturing industry will face severe challenges such as being constrained by upstream sectors, under pressure from downstream sectors, and unstable industrial chains.

Conclusion

Looking at a series of actions since the start of 2026, such as layoffs, closures, reorganizations, and asset sales, they are no longer passive choices of individual enterprises, but a collective reflection of the global plastics and chemical industry entering a cycle of in-depth adjustment. Under the multiple pressures of supply-demand imbalance, high costs, overcapacity, and weak global demand, the industry is undergoing a brutal reshuffle to eliminate bubbles, inefficiencies, and outdated production capacity.

For enterprises, the era of blind expansion has come to an end. Focusing on core businesses, streamlining costs, improving efficiency, and accelerating transformation are the core logic to navigate through cycles. Only those enterprises that can maintain cash flow, optimize production capacity structure, and keep up with the trends of new materials and high-endization are likely to survive this round of cold winter and go further.

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