Orion S.A. announces layoffs amid preliminary fiscal year 2024 update

Houston, TX – Orion S.A. has announced a series of layoffs as part of its preliminary fiscal year 2024 update. The company revealed that it will reduce its non-plant workforce by approximately 6%, a move expected to generate around $6 million in annualized cost savings starting in 2025. This decision comes as Orion faces several financial challenges, including foreign exchange translation impacts and weaker-than-anticipated volumes in its Rubber segment.

The layoffs are part of a broader cost reduction initiative that began in the fourth quarter of 2024. Orion’s CEO, Corning Painter, explained that the company is taking these steps to address the continued pressure on Western tire production, which has been affected by elevated levels of tire imports from Southeast Asia and China. Despite these challenges, Painter expressed confidence in the company’s commercial strategy for the Rubber segment, which he believes positions Orion well for 2025.

In its preliminary unaudited financial update, Orion reported that its adjusted EBITDA for 2024 is expected to be slightly below the guidance range of $305-$315 million1. This shortfall is attributed to the strengthening dollar and one-time costs associated with the cost reduction plan. Additionally, the company experienced a less favorable mix in its Specialty segment, further impacting its financial performance.

Orion’s management remains optimistic about the future, despite the current headwinds. Painter highlighted that the company expects modest growth in 2025, building on the structurally improved returns generated over the past several years. He emphasized that the cost reduction actions are expected to be substantially completed in the first quarter of 2025, setting the stage for a more streamlined and efficient organization.

The company plans to release its full fourth quarter and fiscal year 2024 results after the market closes on February 19, 2025. A conference call to discuss the results will follow on February 20, 2025, at 8:30 a.m. (ET). Investors and analysts can access the call using the provided dial-in details, and a replay will be available through March 6, 20251.

Orion S.A.’s announcement underscores the challenges faced by the specialty chemicals industry amid global economic pressures. As the company navigates these difficulties, its strategic cost reduction measures and focus on long-term growth are expected to play a crucial role in its future success.