Germany’s largest steel producer Thyssenkrupp Steel Europe wants to cut several thousand jobs in the coming years. The company announced that the number of jobs will shrink from the current 27,000 to 16,000 within six years.
Accordingly, around 5,000 jobs will be cut by “production and administration adjustments” by the end of 2030. An additional 6,000 jobs will be outsourced to external service providers or corporate sales. This is one of the core points of an industrial future concept.
Weak demand on the steel market
The company, majority owned by the Thyssenkrupp industrial group, is responding to weak demand in the steel market. Production capacity must be reduced from the current 11.5 million tons per year to only 8.7 to 9 tons. This corresponds to the shipping volume of the previous financial year.
The aim is to create long-term prospects for as many employees as possible, says Thyssenkrupp steel boss Dennis Grimm. We will therefore adapt to the changed market conditions through targeted capacity adjustments and cost reductions. “To position ourselves for the future, extensive optimization and streamlining of our production network and processes is necessary.”
The steel division must go its own way
Parallel to the savings program, parent company Thyssenkrupp wants to continue the independence of the steel division. Czech energy company EPCG, owned by Czech billionaire Daniel Křetínský, currently holds 20 percent, and in a next step this share is expected to increase to 50 percent.
The steel division has been under pressure for a long time, cheap imports from Asia, high costs and weak demand have led to loss-making activities. In the interest of climate protection, high investments are also needed to improve the CO₂ balance of energy-intensive steel production. In Duisburg, ‘green steel’ will be produced with hydrogen in the future; the federal government and the state of North Rhine-Westphalia are financing an expensive new factory with a total of two billion euros.
Despite the strong financial injection from the state, the project is an expensive affair for Thyssenkrupp Steel. According to media reports, internal consideration was given to abandoning the project. The company now emphasizes that it is sticking to its plan to complete the direct reduction plant already under construction. At the same time, “constructive discussions” are being held “to ensure the economic viability of this major investment project under the rapidly changing circumstances.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
