Tata Steel to cut 3,000 jobs across European operations
Tata Steel has confirmed cuts of up to 3,000 jobs across its European operations as part of a wider restructuring and cost-cutting strategy to counter stagnant steel demand in Europe and global overcapacity.
London: Tata Steel has confirmed cuts of up to 3,000 jobs across its European operations as part of a wider restructuring and cost-cutting strategy to counter stagnant steel demand in Europe and global overcapacity.
The Indian steel giant said it plans to lower employment costs with the 'estimated reduction' in employee numbers, about two-thirds of which are expected to be office-based white-collar roles – a majority expected at its Netherlands unit.
"The information shared with the European Works Council select committee lays out the case for change, explains our transformation programme and gives a first overview of the organisational impact," the company said.
"A transformation is needed to mitigate the current structural and cyclical headwinds and create the foundation for the company's future success.
Stagnant EU steel demand and global overcapacity have been compounded by trade conflicts which have turned the European market into a dumping ground for the world's excess steel capacity," it noted.
Through its proposed transformation programme, Tata Steel Europe said it is initially targeting a positive cash flow by the end of its financial year ending March 2021.
It is also aiming for an EBITDA margin of around 10 per cent throughout the market cycle. "We intend to align on our approach and the process going forward and engage with various stakeholders to develop the proposed decisions and ensure compliance with all European and national obligations.
Further details will be provided from this point forward and detailed proposals will be developed from here," the company added.
The steel major, one of Europe's leading steel producers, said the changes were needed to ensure the business can thrive despite severe market headwinds and also accelerate innovation towards carbon-neutral steelmaking.
"Today we are highlighting important proposals towards building a financially strong and sustainable European business," said Henrik Adam, CEO of Tata Steel in Europe, in a statement on Monday.
"We plan to change how we work together to enable better cooperation and faster decision-making.
This will help us become self-sustaining and cash positive in the face of unprecedented severe market conditions, enabling us to lead the way towards a carbon-neutral future," he said.