Thyssenkrupp’s steel division, Thyssenkrupp Steel Europe (TKSE), has announced plans to cut approximately 11,000 jobs, representing around 40% of its workforce, as part of a significant restructuring effort aimed at improving productivity and reducing costs. This decision comes in response to ongoing challenges from cheaper Asian competitors, elevated energy prices, and a declining global economy.
Key Highlights:
Job Cuts: The restructuring plan includes the elimination of 5,000 jobs by 2030, with an additional 6,000 jobs to be reduced through spin-offs or divestitures. The overall goal is to lower personnel costs by about 10%.
Closure of Facilities: The Kreuztal-Eichen plant, which employs 500 workers, is set to close. Additionally, Thyssenkrupp is looking to divest its stake in another facility in Duisburg, with potential closure discussions if a sale cannot be achieved.
Production Capacity Reduction: TKSE aims to decrease its annual production capacity from 11.5 million metric tons to between 8.7 and 9 million metric tons to align with future market expectations.
Union Response: The announcement has met with strong opposition from the IG Metall union, which represents steelworkers. Union leader Knut Giesler warned of “fierce resistance” against the planned job cuts and facility closures.
Government Support: German Economy Minister Robert Habeck emphasized the importance of protecting domestic steel production while committing to a transition toward more climate-friendly manufacturing practices.
Industry Context: Thyssenkrupp’s steel division has faced operating losses in four of the last five years, prompting this drastic overhaul. The company recently wrote down the value of its steel division by €1 billion ($1.1 billion), reflecting the sector’s deteriorating outlook.
Broader Industry Challenges: Germany’s industrial sector is experiencing a downturn, with slowing production, decreasing foreign demand, and rising costs. Other major companies, including Volkswagen, are also contemplating factory closures and workforce reductions.