Germany's Thyssenkrupp is embarking on one of the largest job cuts in its history, announcing plans to eliminate around 11,000 positions from its steel division by 2030—a staggering reduction of over 40% from its current workforce of approximately 27,000. This drastic move aims to stabilize the company, which has been grappling with high production costs and intensifying competition, particularly from Asian rivals.
On Monday, company representatives indicated this restructuring would involve cutting about 5,000 jobs directly through layoffs, with another 6,000 positions impacted by outsourcing or the sale of specific business activities. The overall strategy, Thyssenkrupp explained, is not only to secure the future of its steel division but to adapt to what it describes as “changed market conditions.”
The group's steel division, noted as Germany’s largest steel producer, has been suffering under the weight of financial losses, compounded by rising energy prices and decreased competitiveness. Thyssenkrupp has faced challenges for several years, compounded by the global economic climate and fluctuated demand patterns for steel products.
The company’s decision also marks a pivot to lower its production capacity from 11.5 million tonnes annually to between 8.7 and 9 million tonnes. This reduction reflects the firm’s strategic shift aimed at aligning operations with current market realities
Company spokesman Dennis Grimm emphasized the necessity for these reductions, stating the need for “targeted capacity adjustments and cost reductions” to support long-term employee prospects. He acknowledged the difficult path forward but stressed the importance of making the company more efficient for future stability.
Union reactions have been swift and vehement. IG Metall, the largest trade union representing many Thyssenkrupp employees, condemned the restructuring as catastrophic. Knut Giesler, union leader for North Rhine-Westphalia, criticized the cuts as crossing “red lines” and warned of impending resistance. He expressed concern over the loss of jobs and closures threatening the stability of many families, urging Thyssenkrupp to reconsider.
Efforts to ease the impact on the workforce include encouraging voluntary departures before resorting to layoffs, indicating the company’s intention to navigate these reductions as sensitively as possible. While the steelmaker hopes to mitigate outright job losses, the significant scale of cuts poses a dire challenge to many employees.
Alongside its plans for job cuts, Thyssenkrupp is also exploring options to divest or sell shares of its Krupp Mannesmann steelworks based in Duisburg. If a buyer is not identified, the firm has stated it is prepared to engage with existing stakeholders on viable scenarios for possible closures. The company has confirmed plans to close its processing center located at Kreuztal-Eichen, which will contribute to the overall reduction of its operational footprint.
Earlier this year, Thyssenkrupp entered discussions to sell a 20-percent interest in its steel unit to Czech billionaire Daniel Kretinsky, with aspirations for him to eventually hold 50 percent of the unit. This shift is part of the broader strategy to transform and restructure the steel division independent from the parent conglomerate. These discussions, which have been described as pivotal, highlight the long-running desire of Thyssenkrupp’s leadership to divest itself from the steel sector.
The overarching strategy reflects not only Thyssenkrupp's immediate financial pressures but also broader trends seen within the German industry. Economic woes spanning from increasing international competition to stricter environmental regulations and high energy costs have prompted similar actions across various sectors from automotive to manufacturing.
Germany's economic situation has been precarious, with minimal growth recorded over the past two years. The latest financials indicate the economy barely expanded by 0.1 percent from July to September of this year, leaving analysts skeptical of achieving substantial recovery before 2025 barring significant governmental intervention.
These layoffs are part of a concerning trend where numerous German firms announce workforce reductions. The automotive supplier Bosch has announced plans to lay off 5,500 workers, and Ford recently disclosed eliminating 4,000 jobs primarily across its German operations. This creates unease among workers, particularly as unions like IG Metall are currently negotiating with companies, including Volkswagen, about potential cuts to jobs amid broader restructuring efforts.
Ongoing discussions and union-led initiatives could well shape the course of negotiations as Thyssenkrupp aims to stabilize its operations. The steelmaker’s restructuring plan serves as both a reaction to current pressures and signal for the direction it intends to pursue within Germany's challenging industrial environment, where global competitive pressures are continuously mounting.
Thyssenkrupp's significant changes showcase the struggles of traditional industries to adapt amid shifting economic landscapes. With job cuts and restructuring discussions changing the future for thousands, the fallout of this corporate shakeup will resonate throughout the industrial sector, highlighting the urgent need for solutions to bolster Germany's struggling economy.
