 "Thyssenkrupp to cut 11K jobs at steel division in major corporate shakeup")
Thyssenkrupp Steel Europe (TKSE) plans to reduce its workforce by 11,000 people or roughly 40%, the company said on Monday, the latest major restructuring to be announced by a German industrial giant.
Germany's largest steelmaker, a division of Thyssenkrupp AG , is under pressure from cheaper Asian competitors, high power prices and a weakening global economy, leading to operating losses in four of the past five years.
Thyssenkrupp will cut 5,000 jobs by 2030 and an additional 6,000 jobs through the sale of business activities or transfer to external service providers, it said.
"Urgent measures are required to improve Thyssenkrupp Steel's own productivity and operating efficiency and to achieve a competitive cost level," the company said in a statement.
The new strategy also foresees the reduction of production capacity from 11.5 million metric tons to a future shipment target of 8.7 to 9 million tons, "an adjustment to future market expectations", TKSE said.
Its processing site in Kreuztal-Eichen is to be closed, the company said.
More From This Section
The sale of its plant in Duisburg, Huettenwerke Krupp Mannesmann, is also a key part of the planned capacity reduction, but if a sale is not achievable, it will hold talks with other shareholders about closure scenarios, the company said.
"Anyone who wants to cut over 11,000 jobs and close a site must expect fierce resistance from IG Metall," said Knut Giesler, head of the IG Metall union in the western state of North Rhine Westphalia.
Other big German companies are also considering shutting down factories. Last week, workers and management at carmaker Volkswagen held a third round of crunch talks over pay cuts and possible factory shutdowns in Germany.
Earlier this month, Thyssenkrupp wrote down the value of its steel division by another 1 billion euros ($1.1 billion), blaming the sector's worsening outlook.
TKSE is now valued at 2.4 billion euros in the group's books, less than half what it was worth two years ago as the prospects for Europe's biggest economy continue to darken.