LONDON — German steelmaker ThyssenKrupp AG will cut 2,000 jobs in its Steel Europe division by 2015 as part of an efficiency program aimed at increasing profitability and competitiveness, the group said Feb. 8.
The current 27,600-strong Steel Europe work force will be cut back in a "socially responsible way," the company said, adding that another 1,800 employees could face redundancy through the potential divestment of business units.
Cost savings are planned to amount to €500 million ($675 million) by the end of the company’s 2014-15 fiscal year, which runs from Oct. 1 to Sept. 30.
Aside from structural changes, ThyssenKrupp is also considering the "closure, relocation or sale of business units and facilities," it said.
Negotiations are under way with workers’ representatives in Germany over the coil coating line at the Duisburg-Beeckerwerth plant, one of two electrolytic coating lines at the Dortmund facility, and the cold-rolling and coating plant in Neuwied.
The future of grain-oriented electrical steel production and the hot-dipped galvanizing line at Galmed, in Spain, is also being discussed, the steelmaker said.
The cost-cutting program is necessary because of challenges facing the European steel market, ThyssenKrupp said. These include high raw material and energy prices, Russia joining the World Trade Organization, and economic uncertainty and reduced consumption in southern Europe.
The group plans to make a positive difference in earnings before interest and taxes of €2 billion ($2.68 billion) over the next three years through changes in its business portfolio, corporate culture and performance, it added.
A version of this article was first published by AMM sister publication Steel First.