ICI has said it will shed more than 700 jobs and cut other costs after first-quarter profit fell 21 per cent with little hope of its markets recovering in 2003.
The maker of Dulux paints has ruled out big asset disposals.
The sharp profit fall had been flagged by the firm in a trading update in March, which revealed rising raw material costs at three of its four main businesses - adhesives and food thickeners unit National Starch, flavourings and fragrances unit Quest and specialty chemicals unit Uniqema.
ICI's pre-tax profit before exceptional items and goodwill for the January-March quarter fell to £52 million sterling from £66 million in the year-earlier period, slightly above its March guidance of £50 million.
ICI said it would take an exceptional charge of around £53 million linked to the restructuring and forecast annual cost savings of around £30 million by 2005. The jobs would go over two years, it said.
The company, one of Britain's proudest corporate names with around 36,700 employees and some 50,000 products, has been battling an economic slowdown that has cut demand.
Shares in the firm closed at 129-3/4p yesterday, valuing it at around £1.53 billion. The stock has fallen nearly 60 per cent over the past year.