Tata Steel to cut jobs in major European restructuring
Company rules out plant closures but cuts will run across the continent in bid to save £150m
Indian-owned Tata Steel plans to cut jobs across Europe as part of a “fundamental change” to its operations, as it tries to future proof its business in a challenging market.
In an interview with the Financial Times, chief executive Henrik Adam said the company would cut jobs at its main British and Dutch plants, as well as at manufacturing operations across the continent, as part of an effort to slash employment costs by £150m ($194m).
The scale of the redundancies was not revealed, but Adam stressed that no plants would be closed. The business employs around 20,000 people in its European operation.
Other changes include streamlining supply chains and more efficient use of technology, the company says.
The European steel industry faces challenging times, with higher raw material costs, tough international competition and stagnation in the manufacturing sector all hitting profits. Steelmakers also say Europe has become a dumping ground for the world’s excess steel capacity.
The tough environment has forced steelmakers in the region to idle plants and reduce output, leading to fears of mass job losses.
Last week Chinese steelmaker Jingye signed a provisional deal to buy British Steel, which went into compulsory liquidation in May. British Steel was sold by Tata for £1 in 2016.
Tata’s efficiency drive comes in the wake of Brussels’ decision to block a merger of its European operation with Germany’s Thyssenkrupp on competition grounds. The companies hoped the merger would cut costs and make European steel more competitive.
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