Tata Steel to cut up to 3000 jobs across Europe
The growing headwinds the European steel industry has been facing this year has impacted Indian steel giant Tata Steel.
"Stagnant EU (European Union) 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," the company shared in a statement.
To combat this stagnant steel demand in Europe and global overcapacity, Tata Steel has laid out a restructuring and cost-cutting strategy, which includes job cuts of up to 3,000 across its European operations.
About two-thirds of the job cuts would be in office-based roles. However, Tata Steel didn't reveal where the job losses would be made and operations of which all locations will get affected.
Currently, the company has steel-making facilities in the UK and the Netherlands, as well as other manufacturing operations.
It was earlier also reported that the Tata group had indicated its plan to invest more in its India operations and expand capacity in Odisha’s Kalinganagar plant instead of Europe. According to a statement by a top official of Tata Group, “The idea is to shrink the European business of Tata Steel and grow the Indian business so that in the overall pie, the contribution of European business is less.”
The EBITDA of Tata Steel Europe business sank 90 percent to £31 Mn (S$54.6 Mn) in the first six months of the current financial year from April on revenue of £3.25 Bn. Now with job cuts across Europe and other moves, the steel major aims for positive cash flow by the end of the year to March 2021.
Tata Steel is not the only one to have been impacted by the stagnant steel demand in Europe. Earlier, in May this year, British Steel Ltd, the UK's second largest steelmaker, was liquidated and taken over by China's Jingye Group Co.
EU steel prices have fallen more than 20 percent over the past year. Only time will tell how measures like restructuring and reduction in employment cost help steel companies combat the industry wide slowdown.