Restructuring plan threatens employment of 20,000 Thyssenkrupp workers
Thyssenkrupp Braces for Potential Job Losses Amid Major Restructuring
Union IG Metall estimates that the estimated 20,000 jobs at Thyssenkrupp could be at risk due to CEO Miguel Lopez's restructuring plans. In an interview with Süddeutsche Zeitung, Jürgen Kerner, the union's second chairman and vice-chairman of Thyssenkrupp's supervisory board, commented on the plans, stating that they would significantly impact more than 20,000 employees.
Criticizing the focus on maximizing profits and shareholder interests, Kerner expressed concern that the restructuring would disregard employee interests. Lopez intends to transform Thyssenkrupp into a more agile and investor-friendly structure by splitting the conglomerate into several independent units. These units could be sold, listed on the stock exchange, or brought in partnerships over the coming years. The employee representatives are prepared for talks, but they demand more transparency from Lopez.
Thyssenkrupp is undergoing a major transformation aimed at creating a more versatile and attractive structure for investors. The cornerstone of the plan involves separating the business units into standalone entities, such as Material Services, Automation Technology, and other divisions like automotive technology and decarbon technologies. Each independent unit is expected to attract external investment, which will encourage growth and innovation by providing fresh capital and expertise.
Under the new structure, Thyssenkrupp will operate as a strategic holding company, maintaining stakes in its core businesses while granting them greater operational independence. Notable ventures and spin-offs include thyssenkrupp Steel Europe, which is aiming for a 50/50 joint venture with equity group EPG, and thyssenkrupp Marine Systems, which is preparing for a partial spinoff and future public listing. The new structure is anticipated to be presented to the supervisory board by the end of September 2025, with implementation to follow shortly after.
The restructuring consists of cost-cutting measures such as a recruitment freeze, streamlined inventory management, and adjustments to indirect personnel costs. While the specific number of job losses has not been finalized, up to 20,000 jobs could be affected, with the steel division facing the brunt of the impact due to fierce competition, high costs, and falling prices. The company is currently negotiating with labor unions, such as IG Metall, to determine the terms of workforce adjustments. An agreement in principle has already been reached for thyssenkrupp Steel, with a collective bargaining agreement expected by summer 2025.
Thyssenkrupp projects a return to profitability for 2024/2025, with net income anticipated to improve to between €100 million and €500 million. Free cash flow before mergers and acquisitions is projected to fall between €0 and €300 million. The restructuring aims to ensure future competitiveness and growth through increased financial flexibility and strategic partnerships, despite the uncertainty it poses for workers, particularly in the steel sector.
- The employee representatives at Thyssenkrupp, led by Union IG Metall, are eager to engage in talks about the company's restructuring plans, demanding greater transparency from CEO Miguel Lopez to protect the interests of the more than 20,000 employees potentially at risk.
- Thyssenkrupp's restructuring plan, aimed at appeasing investors, includes splitting the conglomerate into various independent units like Material Services, Automation Technology, and other divisions, which could be sold, listed, or partnered over the coming years, affecting finance and business operations significantly.
- Amidst the major restructuring, political discussions surrounding community policy and general-news are largely focused on the impact of the job losses in various industries, such as the steel sector, and the need for vocational training programs to ease the transition for affected workers.
