Goodyear struggles with tariff impacts, sees layoffs continuing

USA Today

a day ago

The Goodyear Tire & Rubber Co. has told federal regulators it expects to initiate at least 1,800 layoffs in 2025 as it wrestles with rising tariffs and the effects of inflation.
About 750 of these cuts were initiated in the first half of the year, filings with the Securities and Exchange Commission show — including 80 or fewer positions based at its Akron headquarters, a Goodyear spokesperson confirmed Aug. 11. The layoffs also include roughly 900 employed and contracted jobs in South Africa.
The company said during an Aug. 8 earnings call that its second-quarter results did not meet expectations. Goodyear reported an adjusted net loss of $48 million for the quarter ending June 30, down year-over-year from $48 million in adjusted net income for the second quarter of 2024.
The company's reported loss per share of 17 cents for the second quarter of 2025 was 54 cents below the Zacks Consensus Estimate of a 37-cent-per-share gain.
The stock has taken a hit since the quarterly earnings were announced Aug. 7 after the close of trading. As of 2:20 p.m. Aug. 12, its value had dropped $1.85 or nearly 18% over the last five days to $8.40.
Tariffs, inflation impacting Goodyear finances
Goodyear's annualized tariff costs equate to about $350 million, Christina Zamarro, the company's executive vice president and chief financial officer, said on an earnings call on Aug. 8.
That's $50 million above the estimated $300 million in annualized tariff costs that Goodyear reported in May, when it announced results for the first quarter of 2025.
For the third quarter, Zamarro said, "Inflation, tariffs and other costs are expected to be a headwind of approximately $180 million, reflecting higher costs given U.S. tariffs impacts and a global inflation rate of about 3%. This amount captures above-average increases in freight rates and transitory manufacturing costs associated with announced facility closures. We expect this amount to increase in the fourth quarter."
Goodyear raised prices in the U.S. and Canada due to tariffs, company President and CEO Mark Stewart said on the call.
Zamarro said Goodyear will likely "will make adjustments to our supply chain" to reduce the risk of tariffs on the company's profit and loss statement for the remainder of 2024.
Goodyear has talked with multiple partners in the supply chain about participating in more trade involving the United States, Mexico and Canada under the United States-Mexico-Canada Agreement, Stewart said.
Shippers of goods between the three North American countries can claim "preferential treatment" under the trade agreement, which was passed during President Donald Trump's first term, depending on how much of those goods were produced in the countries from which they are exported, according to Canada's Trade Commissioner Service.
Goodyear announced 1,800 new layoffs in 2025
Aside from the 1,800 layoffs initiated in 2025, Goodyear also ended the employment of about 700 employees in the first half of 2025 "under plans initiated in prior years," the filing said.
Goodyear also approved a plan in the second quarter to close a manufacturing facility in Kariega, South Africa, which includes the planned elimination of 900 employed and contracted positions, according to the SEC filing.
"Approximately 2,700 associates remain to be released under all ongoing rationalization plans," the filing said.
The 2,700 number includes layoffs at the South Africa facility and layoffs at a plant in Danville, Virginia, that the company announced in January, the Goodyear spokesperson said.
Goodyear has about 68,000 employees, including roughly 2,500 at its Akron headquarters, the spokesperson said.
Patrick Williams covers growth and development for the Akron Beacon Journal. He can be reached by email at [e-mail] or on X, formerly known as Twitter, @pwilliamsOH. Sign up for the Beacon Journal's business and consumer newsletter, "What's The Deal?"