Thyssenkrupp Steel Europe’s new chief executive has informed the company’s 27,000 employees about impending job cuts. This move comes as many companies in Germany and Europe are implementing cost-saving measures, downsizing, and closures to stay competitive in challenging market conditions.
New steel chief informs employees
Dennis Grimm, the new head of Thyssenkrupp’s steel division, has prepared the workforce for a reduction in personnel. In an interview with the “Westdeutsche Allgemeine Zeitung” (WAZ), Grimm stated, “We cannot yet quantify exactly how many people we will employ after the completion of the business plan and negotiations with employee representatives.” However, he confirmed that the number would be lower than the current workforce.
Grimm emphasized the necessity of these measures, saying, “We need to become more profitable. Tough cuts are necessary.” This statement underscores the challenging situation facing the steel producer and its workforce.
Leadership changes and strategic shifts
Grimm has taken over from Bernhard Osburg, who resigned due to disagreements with group CEO Miguel Lopez over the future of the steel division. Lopez’s strategy involves reducing production capacities in response to weak demand and plans to spin off the steel business into a 50:50 joint venture with the energy holding company of Czech billionaire Daniel Kretinsky. This proposed restructuring has raised concerns among employee representatives, who fear the loss of thousands of jobs.
Market challenges and industry outlook
Explaining the current market situation, Grimm told WAZ, “The current market situation has deteriorated further in recent months, and unfortunately, a recovery is not in sight.” He stressed that Thyssenkrupp Steel must respond to these challenging conditions.
The steel industry is grappling with multiple challenges, including:
- Weak demand, particularly from the automotive industry
- High energy costs
- Low-cost competition from the Far East
These factors are putting significant pressure on European steel producers like Thyssenkrupp, necessitating strategic changes and cost-cutting measures to maintain competitiveness in a difficult global market.
As Thyssenkrupp Steel Europe moves forward with its restructuring plans, the exact scale of job cuts and the impact on its operations remain to be seen. The company’s management will need to navigate carefully through negotiations with employee representatives while addressing the pressing need to improve profitability in a challenging market environment.
