Amid cuts, DuPont redeploys scientists (Updates)

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A DuPont logo is pictured on the EMEA (Europe, Middle East & Africa) and Du Pont de Nemours International SA building in Grand-Saconnex near Geneva in this August 4, 2009 file photo. REUTERS/Denis Balibouse/Files

UPDATES 1/5: Several sources tell me DuPont has kept no more than 10% of the Ph.D. scientists at its Central Research & Development unit in Wilmington in their labs; they will join a smaller successor "Science and Innovation" unit. The company is also reassigning up to 1/3 of the group to business units around the company (details to come); and is laying off at least 1/2.

The cuts follow elimination of a central marketing group; cancellation of a big IT project and SAP installation; and other central function cuts; and cuts in Delaware-based agricultural research and support. DuPont is cutting 1,700 of its 6,100 Delaware staff this month in advance of its planned merger with Dow Chemical Co. Dow units will absorb DuPont's profitable ag and performance chemicals groups into spin-off companies; remaining DuPont businesses will be reorganized as a new, leaner specialty-materials company. 

- A researcher tells me he asked more than two dozen colleagues at DuPont Central Research & Development in Wilmington after yesterday's layoffs to learn their fates. He says 2 kept their jobs; 15 are laid off; 9 were "pushed into business" units elsewhere at DuPont.  

- Another source tells me all but 1 of 12 scientists in one area have been given "Career Transition Program" plans. Those who may be getting other jobs in busineses have not yet been assigned. He also says he now expects fewer than the 51 people I reported last week (from a different source) will remain in "Science and Innovation," the unit replacing Central Research and Development. 

- The Wilmington News Journal, citing unnamed sources, says 200 scientists at DuPont Experimental Station lost their jobs today, 150 will be transferred to business units, just 16 PhD scientists will remain (a source told me last week there'd be 17, plus 34 associates, of 250 total. Looks like News Journal might also be counting Industrial Bioscience scientists who were previously separated from the Central Research unit but remained at DExSta.)

- I'm hearing that some lab buildings at DuPont Experimental Station will be mothballed for likely future demolition (as were old AstraZeneca labs nearby on Del. 141 last year after researchers there were laid off.)

DuPont spokesman Daniel Turner told me the company wouldn't comment on these accounts of what may happen to the research group, which he called "speculation." -- If you have more to tell, you can reach me at JoeD@phillynews.com. Confidentiality respected.

MONDAY 1/4: Douglas Muzyka is among the thinning group of DuPont Co. executives taking on more responsibility and guiding the company through 1,700 Delaware layoffs today (1/4) and this month. On Dec. 14, DuPont said senior DuPont Engineering executives James C. Borel, Gary W. Sptizer and Karen Fletcher "elected to retire," three days after DuPont announced plans to merge with Dow Chemical. CEO Edward Breen added their group -- Engineering Technologies -- to Muzyka's previous duties as Senior Vice President and Chief Science and Technology Officer. (Revised)

In the memo below, sent to DuPont science and technology staff late last week, Muzyka says research will move toward DuPont's separate business groups as the company strips down its Central Research & Development group in Wilmington. See also this note from a DuPont researcher I posted last week. Separately, another correspondent writes: "Today is the day people in CR&D learn their fates. The bloodletting will go on all day. Employees have 10 minute appointments with their managers, one by one."

Muzyka's memo (emphases added):  Dear Colleagues: I know it has been quite a remarkable and challenging month for all of us, with many significant changes announced.  As we close out 2015, I wanted to provide some perspective to you, our science and engineering team, on what has happened and what we can expect going into 2016.

On December 11th, we announced our agreement to merge with Dow and our intention to subsequently create three strong independent companies: an Agriculture company, a Material Science company, and a Specialty Products company.  Independent of the merger, we also announced DuPont’s 2016 $700 million cost reduction program that includes a 10% global workforce reduction.

Earlier this week, we announced that the impact of the cost reduction program will be particularly significant in Delaware, with approximately 1,700 local positions being eliminated in the state. (DuPont employed 54,000 worldwide, including 6,100 in Delaware; so the local cuts are almost 3x total job losses. DuPont confirms its central research group is based mostly in Delaware.)

As you know, changes to the scientific and engineering community were also recently communicated, including that we are bringing together our Science & Technology and Engineering organizations under common leadership and forming DuPont Science & Engineering.

As part of this restructuring, we are redesigning the existing Central Research & Development operating model to assess and seed new, transformational science-based ventures as the next step in the evolution of corporately funded R&D for DuPont. 

We are also transferring some personnel from CR&D and Engineering into our business units to further accelerate growth.   Our new structure will position our science-based innovation capabilities for the merger and the intended subsequent creation of three independent companies.

I know that there has been a lot of speculation across the organization, in the media and throughout the scientific communities about what the total impact of these changes will be on DuPont’s R&D function, and what DuPont’s commitment to scientific research will be going forward.

Frankly, the impact on R&D has been mischaracterized by many media reports, especially those that suggest that corporately funded R&D is being completely eliminated, or that the cost reduction effort at DuPont is targeting R&D.  

The total R&D budget impact associated with the 2016 cost reduction program is in line and consistent with the overall cost reduction that is occurring throughout the company, and the new Science & Engineering organization will continue to drive forward the key innovation principles that have distinguished DuPont. 

Moving forward into 2016, DuPont will continue to be a leading investor in industrial research and development.   Merged with Dow, our combined investment in R&D will create profound scope and scale to drive growth in the future.  

While these facts do not offset the difficulty and disruptive nature of change or the personal dislocation that R&D employees and their families are experiencing, I thought it was important to clarify them. 

I also want to emphasize that DuPont remains fundamentally, deeply committed to scientific innovation.  DuPont R&D has a long standing reputation for excellence – a reputation earned, at least in part, through accomplishments that result from a willingness and ability to adapt to the evolution and direction of science and to connect our science to the changing demands of the marketplace.

The changes we are making to our corporate R&D function, and the related cost reductions, are the product of a careful analysis of how we can improve the overall productivity of our R&D function company wide, maintaining scientific excellence and performing more competitively in the marketplace. 

Science & Engineering at DuPont has been a constant foundation for growth for our company, but it has never been static. 

At various times, the balance of business-centered innovation and corporately funded research, our emphasis on inventing versus acquiring new science, and our approach to designing and building our manufacturing assets ourselves versus engaging external capabilities, have all shifted in light of the different realities of our competitive environment and the need to renew our direction.  

Indeed our historical capability to change and adapt has been core to ensuring our longevity and the rightly deserved reputation for leadership that we have earned among the science and engineering community worldwide.

The coming weeks and months will be challenging for all of us.  Please keep in mind that change is fundamental to our business model - all of the current change has purpose. 

The optimization of our portfolio of businesses with Dow’s offers a clear opportunity to provide the future businesses with the focus and scale to compete globally.   The 2016 cost reductions will make us more efficient and productive so we can compete successfully in the increasingly competitive global market.  

As we move forward in 2016, I personally believe that the best thing that we can do for each other is to work together and to stay focused on our Core Values.

Sincerely, Doug Muzyka