ThyssenKrupp is to slash at least 2,000 of the 27,600 jobs at its European steelmaking division and may also sell some units, the German industrial conglomerate said Friday. In addition, successful disposal deals would mean as many as 1,800 current workers in the Steel Europe division might find themselves working under new owners. ThyssenKrupp, a flagship of German industry which also builds engineering products, has stumbled in recent months.
In a statement, the group blamed the "difficult market environment" and said it aimed to save around 500 million euros (675 million dollars) annually through the cuts, which would be implemented by the 2014-15 financial year.
ThyssenKrupp specializes in expensive, higher grades of steel that need advanced technology to make. "Steel Europe is holding up very well compared with competitors, but ... no longer covers its costs of capital," the statement said, referring to the returns on its shareholder investment.
"On top of this, the European steel industry faces major challenges: the steel market climate in Europe is worsening," it added. It blamed high raw material and energy prices, CO2 allowance trading, Russia's accession to the World Trade Organization creating a new source of competition, and "sharply reduced consumption levels."
The cuts were under discussion with labour leaders at four German sites and at the ThyssenKrupp Galmed site in Spain.The group, which also makes engineering products ranging from ships to escalators, is based in the German city of Essen and says it has 150,000 employees in over 80 countries.