130 jobs in Switzerland affected

The ailing steel company Swiss Steel is making tough cuts. Due to weak demand, the central Swiss company is cutting around 800 of its total of around 7,500 jobs.

In Switzerland, 130 of the current 750 jobs are to be cut at the Emmenbrücke plant, as Swiss Steel announced on Friday. The reduction affects production and administrative areas.

The natural fluctuation will probably not be sufficient for this, it was said. The company is therefore expecting 80 layoffs. The consultation process with the staff representatives has been initiated.

However, the Swiss location is not in danger, said CEO Frank Koch in an interview with “Finanz und Wirtschaft”: “We have our Swiss factory and headquarters in Emmenbrücke. However, Switzerland is less relevant as a sales market because our focus is on markets outside of Switzerland.”

Most of the deletions abroad

The majority of the cuts are taking place abroad. It was said that the European production sites and the entire sales organization were affected. The reduction of 800 jobs consists of the elimination of 530 jobs and the reduction of working hours for a further 270 full-time positions.

To this end, weekly working hours at the German subsidiary Deutsche Edelstahlwerke will be reduced by around 15 percent. These steps would be largely effective as early as 2025, it was said. With the cuts, the number of employees in the group will fall to under 7,000 employees in the first half of 2025.

According to management, the current restructuring program is not enough. Because demand in European industry remains weak, production levels are low and customers’ growth prospects are subdued, these adjustments are needed, wrote Swiss Steel. With the dismantling, the steel company wants to secure the production sites in Switzerland, Germany and France in the long term.

“We are heavily dependent on industrial production, whether it’s machines, cars or airplanes. When we made the plans for 2024 in 2023, the industry forecasts in Europe looked significantly better,” said Koch.

Auto industry suffers from weak demand

The problem is that in Europe the energy system and transport are being converted and industry is being decarbonized at the same time. “The combination of this results in an extreme weakness in consumption. Fewer vehicles are being purchased, and therefore suppliers need fewer machines and therefore less steel,” said Koch.

The most important sales market is Italy, followed by Germany and France. And “Germany as a business location has, in my opinion, done the worst job in Europe in recent years,” said the Swiss Steel boss. Changes such as adjusting energy costs, network costs, planning security and foreign trade protection must be addressed in the right order.

“The mistake in looking at this is that products not only have to be competitive, but also attractive to consumers. When prices are so high, customers hesitate to make purchasing decisions,” he said. Customers prefer to wait and see whether a car will be subsidized, whether it will be electric or hybrid, or whether the combustion engine will remain an option, said Koch, who criticized the policy of the German traffic light government, which has now collapsed.

Decarbonization is not possible overnight

«We cannot decarbonize our entire value chains overnight. “That doesn’t work in reality,” said Koch. Clear guidelines are needed as to which industry should be decarbonized, in which order, and with which products. “And that’s missing.”

Swiss Steel is making a decisive contribution to decarbonization with its “green steel”, which is produced with around 83 percent fewer CO2 emissions than conventional steel. “But only if our customers have the entrepreneurial incentive to demand our products,” said Koch.

When asked how long the turnaround should take, Koch said: “Other companies in our industry needed a decade to successfully restructure.”

Trade unions call for politicians to wait and see

The Unia and Syna unions as well as the Swiss Commercial Association reacted immediately to the announced layoffs. In a joint statement, they are calling for an immediate waiver of layoffs at Steeltec AG in Emmenbrücke. Instead, the company should wait until the end of the year for political decisions or, if necessary, introduce short-time work. It is crucial to maintain production capacities and know-how.

They are calling on politicians to push forward solutions for the preservation of the Swiss steel industry and to improve the conditions for steel production. “Together with Stahl Gerlafingen, the plant in Emmenbrücke is the last steelworks in Switzerland – and both are struggling with economic difficulties, among other things because of the high electricity costs,” they remind.

The Swiss Association of Employees sounds similar: “We demand quick action from political decision-makers. This is the only way to ensure that the Swiss steel industry not only survives, but also goes into the future stronger,” writes association member Pierre Derivaz in a statement. (awp/sda)