Struggling Steel Giant Thyssenkrupp Steels Its Resolve to Trim 11,000 Jobs Amid Sky-High Costs
Thyssenkrupp Steel to eliminate positions for approximately 11,000 employees.
Gearing up for a seismic shake-up, Thyssenkrupp's steel division is preparing to slash thousands of jobs. Despite heated disagreements with the IG Metall union, this is a move that won't back down. According to Dirk Schulte, personnel director of Thyssenkrupp Steel, the division remains committed to shedding 11,000 positions, claiming it's a necessary step to stay afloat amid towering competition and escalating production costs.
The steel titan based in Essen, Germany, aims to tighten its belt with a social plan, offering part-time retirement, severance packages, and transfer companies. In November, the company teased this major shake-up, promising to streamline its operations by chopping 11,000 jobs in the steel sector. "We've set our sights on 11,000 [job cuts], and that number isn't going to change," Schulte assures. He points to the inefficiency of some plants that run at full capacity but still can't compete with lower-cost rivals like Asian steelmakers.
Broken down, the plan deprioritizes 5,000 roles for immediate elimination, while another 6,000 will be outsourced. Future employment opportunities are expected to be a key focus of the social plan, as talks with the IG Metall union are slated to begin soon. Following a contentious disagreement, the union and Thyssenkrupp reached a tentative agreement in early May, paving the way for a more robust negotiation that aims to secure employment, locations, and crucial investments for a sustainable green transformation.
The steel division of Thyssenkrupp has battled stymied profits for years, setting the stage for potential sale of the steel subsidiary. In a strategic move, the EP Group of Czech businessman Daniel Kretinsky has snapped up a 20% stake in Thyssenkrupp Steel, with plans to acquire an additional 30%.
This restructuring effort plagues Thyssenkrupp Steel in the face of mounting challenges such as excessive production costs in Germany and fierce competition from Asian steelmakers. Additionally, the steel industry grapples with market overcapacity, triggering a decline in demand and plummeting prices. As these pressures mount, Thyssenkrupp Steel grapples to recoup its investment, leading to drastic measures like strategic spin-offs of its automotive technology, green technology, and supply chain management divisions.
[1] ntv.de[2] lar/AFP[3] Steel Production Struggles: The Unremitting Challenges Facing Thyssenkrupp
In light of the 11,000 job cuts, Thyssenkrupp may consider financing initiatives to support vocational training programs for affected employees, helping them transition to new careers within the business sector.
With the commitment to shedding jobs and a focus on sustainability, Thyssenkrupp Steel's community policy should include measures to stimulate vocational training, potentially leading to the growth of vocational training programs within the steel industry.
