Thyssenkrupp, towards 11,000 job cuts in 6 years

Thyssenkrupp plans to cut or outsource 11,000 jobs by 2030 in its steel division, a sector that has come under severe pressure in recent years due to rising energy prices. The announcement of a heavy restructuring was in the air, and in recent weeks it had also been the subject of a bitter clash between the company's top management, resulting in the resignation of CEO Bernhard Osburg (replaced by the 'hawk' Dennis Grimm) of the chairman of the supervisory board and the first line of top management. Now the plan has been officially presented. In detail, the company explained, the board of the steel unit has proposed to lay off 5,000 workers and transfer another 6,000 to external service providers. In this way, the group aims to reduce personnel costs by around 10 per cent on average over the next few years, in order to 'bring them down to a competitive level'.

The company, which employs around 27,000 people, is currently in negotiations with Czech billionaire Daniel Kretinsky's EP Corporate group, which wants to increase its stake in the steelmaker from 20 per cent (a package recently acquired) to 50 per cent. 'Growing overcapacity and the resulting increase in cheap imports, particularly from Asia, are having a significant impact on competitiveness,' Thyssenkrupp said in a statement.

Thyssenkrupp's steel division made a loss both this year and last due to the need for substantial investments to govern the carbon transition and as a consequence of low steel prices, which together with the difficulties of the user sectors (automotive in particular) are weighing on profits. High energy prices resulting from the Russian invasion of Ukraine and rising interest rates have also increased costs for the division. In addition, the company's high pension obligations have proven to be an obstacle in negotiations with potential buyers in recent years.

The new strategy also includes the reduction of production capacity from 11.5 million tonnes to a target level of future shipments of 8.7 to 9 million tonnes. The processing plant in Kreuztal-Eichen will be closed. The sale of the Duisburg site, Huettenwerke Krupp Mannesmann (a joint venture with Salzgitter and Vallourec) is also a key part of the planned capacity reduction, but if the sale is not feasible, the company will hold talks with other shareholders on closure scenarios, the company said.g

The conglomerate Thyssenkrupp has been pursuing the restructuring of its internal organisation and portfolio for years. Fincantieri itself has never hidden its interest in the Marine division, relating to submarines, while its subsidiary Berco (crawler undercarriages) in Italy has initiated the dismissal procedure for about 500 people (but has withdrawn it in recent days). The group successfully sold its lift division for EUR 17.2 billion (USD 18 billion) in 2020, but its liquidity has nevertheless decreased in recent years, partly due to a series of losses and write-downs (around one billion in the last financial year alone) in its steel division. The German industrial group reported a turnover of EUR 35.0 billion (-7% year-on-year) for the October 2023-September 2024 period, with an Ebitda of EUR 895 million (-47%), an adjusted Ebit of EUR 567 million (-19%) and a net loss of EUR 1.4 billion, compared to a loss of EUR 2 billion in 2022/2023.