News: Tata Steel to shut down Blast Furnaces in the UK, leading to layoffs of 2,800 employees

Strategic HR

Tata Steel to shut down Blast Furnaces in the UK, leading to layoffs of 2,800 employees

Tata Steel's CEO, T V Narendran, acknowledged the difficult nature of the decision while underscoring its importance in transforming and establishing a sustainable business in the UK for the long term.
Tata Steel to shut down Blast Furnaces in the UK, leading to layoffs of 2,800 employees

Tata Steel announced that it will shut down its two blast furnaces in Britain by the end of this year. This decision will result in the loss of up to 2,800 jobs at its Port Talbot steelworks in Wales. 

The closures are a part of Tata Steel's strategy to revamp its unprofitable UK steelmaking business by transitioning to lower carbon electric arc furnaces. This plan is supported by a government investment of 500 million pounds ($634.10 million), reported Reuters. 

Tata Steel stated that approximately 2,500 positions are expected to be cut within the next 18 months, affecting a total of 2,800 jobs. As part of the restructuring, the company will initiate a consultation process and aims to prioritise voluntary redundancies. 

Tata Steel's Chief Executive, T V Narendran, acknowledged the challenging nature of the decision but emphasised its necessity for transforming and building a sustainable business in the UK over the long term.

"The course we are putting forward is difficult, but we believe it is the right one. We must transform at pace to build a sustainable business in the UK for the long-term," Tata Steel Chief Executive T V Narendran said. 

Tata Steel, which has over 8,000 employees in the UK, issued a warning of potential 3,000 redundancies in September when the government unveiled a funding package to secure 5,000 jobs. 

Trade unions Community, Unite, and GMB expressed their disagreement with Tata Steel's plan, stating that they would consult their members on potential next steps, including the possibility of industrial action. 

The shift from blast furnaces to electric arc furnaces, which require fewer workers, is confirmed to result in significant job losses, impacting the region where Tata Steel holds a substantial employment presence.

Tata announced a £130 million support package to aid affected employees in retraining and securing new job opportunities. The transition to electric steelmaking is anticipated to reduce Britain's carbon emissions by 1.5%, particularly significant for Port Talbot's coal-fired plant, the largest single carbon emitter in the country. 

The UK government's financial backing for Tata Steel is seen as vital for sustaining the national steel industry, preventing the potential closure of the plant and averting daily losses of £1 million, as threatened by Tata. Critics argue that the shift to electric arc furnaces, which produce steel from recycled scrap rather than traditional methods using iron ore and coke, may lead to a significant reduction in the industry's size. 

Additionally, China-owned British Steel, currently operating blast furnaces in Scunthorpe, is engaged in discussions with the government to explore cleaner manufacturing methods, potentially resulting in up to 2,000 job redundancies, according to union warnings.

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Topics: Strategic HR, #Layoffs, #HRTech, #HRCommunity

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