Tata Steel plans to cut as many as 3,000 jobs from all of its operations in Europe, the company said on Monday as the sector faced oversupply, low demand and high costs .
Earlier in the day, a source close to the talks had told Reuters that about 3,000 people would be affected after the group’s European CEO, Henrik Adam, announced that Tata was planning to announce job cuts in the European sector without giving figures.
In a statement, Tata said it was urgently seeking to improve its performance by increasing sales of value-added products, improving efficiency and reducing employment costs by reducing the workforce of nearly 3,000 people in all its activities in Europe.
About two-thirds of job cuts are expected to involve jobs, he added.
The Indian company Tata Steel, which launched a transformation program in June to strengthen its operations in Europe, is active in steelmaking in the Netherlands and Wales, as well as downstream throughout Europe.
There will be no plant closures, said Tata, adding that the goal was to protect Tata Steel Europe from challenges such as weak demand, excess capacity and business problems, as well as generating a cash flow effect at the end of its fiscal year ended March 2021.
European steelmakers largely blame China for accumulating a surplus in the market, but the largest steelmaker in the world claims to have made a significant reduction in its capacity.
Tata’s quest to increase profitability follows a European antitrust decision to block a joint venture with Germany’s Thyssenkrupp.
Tata said in a statement that the difficult market conditions had been “aggravated by the use of Europe as a dump for global excess capacity”.
In the first six months of its fiscal year beginning in April 2019, Tata Steel Europe recorded a 90% decline in EBITDA (operating income before interest, taxes, depreciation and amortization).
Britain said last week that Chinese steelmaker Jingye signed an interim agreement to buy British Steel, which went into liquidation in May.
The agreement is politically valid before the British elections as employment opportunities have become a major problem. If confirmed, the rescue could save thousands of jobs.
ArcelorMittal, the largest steel producer in the world, has idled a series of factories across Europe.
Eurofer, representing the European steel industry, said in an email that job losses were “a disturbing and disruptive trend” caused by global overcapacity and hesitant demand.
He urged EU policymakers “to contribute to the stabilization of the European market by avoiding import surges and supporting key workers in the steel sector during this difficult period”.
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. (tagsToTranslate) Employment (t) jobs (t) steel (t) steel tata
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