Dow Chemical plans to cut 11 per cent of its workforce, further increasing the likelihood of record American job loss figures this month.

The company, one of America's biggest chemical producers, said yesterday that it would lay off 5,000 full-time staff, and 6,000 contract workers, when it closes 20 production plants. Dow employs 43,000 people worldwide. A further 180 plants will sit idle until demand for Dow's products, which include food ingredients, pesticides, plastics and Styrofoam, picks up.

This comes on top of 33,000 job losses last week at companies including AT&T, the telecoms company, and Viacom, the owner of CBS and MTV. The US Department of Labour said last week that a record 533,000 people were made redundant last month, fuelling speculation that this month's numbers would be even worse.

Shares in Dow rose more than 7 per cent on Wall Street yesterday to close at $20.37 after Andrew Liveris, Dow's chairman and chief executive, promised that he would not break the company's record of never missing a dividend payment. The company has paid its quarterly cash dividend without interruption since 1912.

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Mr Liveris said: “I've said it before but I'll say it again: we will not break that string. Not Dow. Not on my watch.” The company had already announced plans to move out of the automotive sealers business in the United States, Asia and Latin American and said that it was “exploring strategic options” in Europe.

The latest cuts will save Dow $700 million a year by the end of 2010. These savings are on top of $800 million a year in synergies that the company hopes to extract after buying Rohm and Hass, the chemicals business, for $1 billion in July.

— 3M, the manufacturing company that makes mobile phone circuits and Post-It notes, said that it would cut 1,800 jobs, about 2 per cent of its workforce, by the end of the year. The jobs will go in America, Europe and Japan, saving $170 million next year.

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