AMSTERDAM: Tata Steel plans to cut up to 3,000 jobs across its European operations. The company said that the sector wrestles with excess supply, weak demand, and high costs.
Earlier, a source close to the discussions told Reuters around 3,000 people would be affected after the group’s European chief executive Henrik Adam said Tata was planning to announce job cuts across the European business without giving figures.
In a statement, Tata said it was urgently seeking to improve performance by increasing sales of higher value products, efficiency gains and reducing employment costs by cutting employee numbers by up to 3,000 across its European operations.
Around two-thirds of the job losses are expected to be office-based roles, it said. Indian-owned Tata Steel, which launched a transformation program in June to strengthen its European business, has operations including steelmaking in the Netherlands and Wales and downstream operations across Europe.
There will be no plant closures, Tata said, adding the aim was to shield Tata Steel Europe from challenges, such as weak demand, excess capacity, and trade issues, and to become cash positive by the end of its financial year ending March 2021.
Tata said in a statement challenging market conditions had been made “worse by the use of Europe as a dumping ground for the world’s excess capacity”.
In the first six months of its financial year starting April 2019, Tata Steel Europe reported a drop of 90% in EBITDA (earnings before interest, tax, depreciation, and amortization).
Eurofer, which represents the European steel industry, said in an email job losses were “a worrying and upsetting trend” caused by global overcapacity and hesitant demand.
It urged EU policymakers “to help stabilize the EU market by warding off import surges and supporting vital steel sector workers during this challenging period”.
(Agencies)
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