thyssenkrupp Steel plans up to 11,000 job cuts, site closure

Duisburg - In response to market pressures and the need for increased efficiency, thyssenkrupp Steel Europe AG has unveiled a comprehensive strategy for the future, which includes significant job reductions and the closure of a processing site. The Executive Board presented the key points of this industrial concept to the Supervisory Board's Strategy Committee, outlining measures to adapt to the evolving European steel market.

The plan involves lowering production capacities from 11.5 million metric tons to a target range of 8.7 to 9.0 million metric tons. This adjustment aligns with the previous financial year's dispatch level and is seen as a necessary response to overcapacity and rising imports from Asia. As part of the strategy, the Kreuztal-Eichen processing site will be shut down, and the company aims to sell its shares in Hüttenwerke Krupp Mannesmann (HKM) or explore closure options if a sale is not feasible.

thyssenkrupp Steel is also committed to the green transformation, continuing the construction of a direct reduction plant and planning to replace two blast furnaces in Duisburg by 2030 with the new plant and innovative melters. The possibility of substituting another blast furnace with an electric arc furnace will be considered at a later date.

The restructuring will lead to the loss of approximately 5,000 jobs by 2030 through production and administration adjustments. An additional 6,000 jobs may be transferred to external service providers or lost through the sale of business units. The company also plans to reduce personnel costs by an average of ten percent in the coming years to achieve a competitive cost level. CEO Dennis Grimm emphasized the importance of adapting to market conditions and reducing costs to create long-term prospects for employees and maintain competitiveness.

In parallel with these changes, thyssenkrupp AG (OTC:TKAMY ) is working towards making its Steel business independent, having already sold 20% of its shares to the Czech EP Group. The key issues paper is a foundational step towards a viable business plan and the IDW S6 restructuring expert report, ensuring that thyssenkrupp Steel remains profitable, competitive, and carbon-neutral in the long term.

This strategic realignment, according to Chief Transformation Officer Marie Jaroni, is crucial for the company's operational efficiency and long-term viability, especially as it aims to transition from a coal-based business model to a greener one. The information presented is based on a press release statement from thyssenkrupp Steel.

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Source: Investing.com