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Thyssenkrupp has revealed plans to slash its steel workforce by 40 per cent, dealing the latest blow to German industry as it warned of oversupply in Europe and “a rise in cheap imports” from Asia.
Germany’s largest steelmaker said on Monday it aimed “to cut around 5,000 jobs by 2030 through adjustments in production and administration”, with a further 6,000 roles “to be transferred to external service providers or shed through the sale of business activities”.
Alongside the job cuts, Thyssenkrupp Steel Europe said it planned to close a processing site and slash production capacity by up to a quarter to between 8.7mn and 9mn tonnes.
The plans add to a gloomy backdrop in the first weeks of election campaigning in Berlin, amid growing anxiety about the state of German industry — the backbone of Europe’s largest economy.
Companies such as Volkswagen and automotive suppliers ZF Friedrichshafen, Schaeffler and Bosch have in recent months announced tens of thousands of job cuts, as they warn of slowing sales of new cars in Europe.
The declining European car market — where demand in the past five years has shrunk by roughly 2mn vehicles — has hit steelmakers alongside other automotive suppliers.
The drastic restructuring plans at Thyssenkrupp Steel come as its parent conglomerate Thyssenkrupp attempts to convince Czech billionaire Daniel Křetínský’s EP Corporate Group to raise its 20 per cent stake in the steelmaker to 50 per cent — a contentious process that in August prompted seven directors, including the steel chief, to resign in protest.
“We are aware that this path will demand a lot from many people, especially because we will have to cut a large number of jobs in the next few years in order to become more competitive,” said Dennis Grimm, the steel division’s newly appointed chief executive.
The steelmaker said EP Group was supportive of the restructuring plans.
In a string of writedowns over the past two years, the most recent of which came this month, Thyssenkrupp has cut the value of its steel unit by €3bn.
Jürgen Kerner, deputy chair of union IG Metall who sits on Thyssenkrupp’s supervisory board, said that while the company faced a serious situation, its plans amounted to “a declaration of war on the workforce”.
The union welcomed Thyssenkrupp’s commitment to replace two of its blast furnaces with a direct reduction plant, which in the future will enable the company to produce less carbon-intensive steel using hydrogen.
