The steel branch of the Thyssenkrupp conglomerate announced this Monday, November 25, its intention to cut 11,000 positions by 2030. Or 40% of its workforce.
After Volkswagen at the end of October, a new bloodletting in German industry is expected. The steel branch of the Thyssenkrupp conglomerate announced this Monday, November 25, the elimination of 11,000 positions by 2030, or 40% of its current 27,000 employees. Around 5,000 jobs in production and administration are affected while 6,000 others will be outsourced, the leading German steelmaker announced in a press release.
Thyssenkrupp Steel, which has been accumulating losses for several years, also wants to reduce labor costs by an average of 10%. “in the coming years”. According to the company, these measures are “necessary to improve productivity and operational efficiency, and to achieve a competitive cost level”. In April, the industrial conglomerate announced a restructuring of its subsidiary, its core business. This activity is weighed down by soaring energy prices. Furthermore, “overcapacity and the resulting increase in low-cost imports, particularly from Asia, weigh considerably on competitiveness”, justifies the steelmaker in its press release. Over the 2023-2024 financial year, the turnover of the steel branch fell by 18%, worsening the annual loss of the entire group (1.5 billion euros). Thyssenkrupp, like other steelmakers established in Europe, is also implementing a complex and costly energy transition, increasingly threatened as companies in the sector struggle to generate profits.
“A declaration of war”
According to the plan presented on Monday, Thyssenkrupp's annual steel production capacities will be lowered to a range between 8.7 and 9 million tonnes, compared to 11.5 million today. In addition, the Kreuztal-Eichen site (in western Germany), which employs 1,000 people according to the local press, will be closed. Earlier on Monday, the conglomerate committed to financing its steel branch for the next two years.
At the same time, the group still intends to gradually separate from Thyssenkrupp Steel, a process accelerated in May with the acquisition of 20% of the shares by Daniel Kretinsky (also creditor of Liberation), via its holding company EPCG. Discussions are underway on an additional 30% stake for EPCG, with the aim of creating an equally owned joint company.
For the very powerful German sector union IG Metall, this social plan is a “catastrophe for employees and industry in North Rhine-Westphalia”, birthplace of the group in western Germany. Questioned by the German newspaper Spiegel, one of the union officials, Jürgen Kerner, describes this announcement as “declaration of war”. “We are waiting for clear statements on an exclusion of economic layoffs and on the maintenance of all sites, continues the man who is also vice-president of the supervisory board of Thyssenkrupp. What is needed now is a courageous plan to move forward, not an unimaginative clear cut.”
Updated: at 7:01 p.m. with more context on the state of the global steel market.
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