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Released December 03, 2019 | GALWAY, IRELAND
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GALWAY, IRELAND--December 3, 2019--Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Tata Steel is cutting around 3,000 jobs in Europe, citing "severe market headwinds" that have led to a sharp decline in profitability.
Half of the proposed job cuts will happen in the Netherlands and around two-thirds of all cuts will be office-based ("white collar") roles, the company said. The new round of cuts comes less than three months after Tata revealed plans to shut two U.K. operations with the loss of 400 jobs, blaming a failure to sell off its loss-making Orb Electrical Steels business in Newport, South Wales.
Tata claimed that the European market was now "a dumping ground for the world's excess steel capacity," thanks to stagnant European Union (EU) steel demand and global overcapacity as well as trade conflicts. It also blamed a significant increase in the cost of emission allowances, which has created "an urgent need for improvements" to the company's financial performance. Tata Steel is one of Europe's leading steel producers, with steelmaking in the Netherlands and the U.K., and manufacturing plants across Europe and a combined workforce of 21,000. However, in the first six months of its current financial year (starting April 2019), Tata Steel Europe reported a drop of 90% in earnings before interest, taxes, devaluation and amortization (EBITDA) to £31 million ($40 million). Revenue was £3.25 billion ($4.19 billion).
Industrial Info is tracking 14 Tata projects in Europe, all in the U.K. and the Netherlands, worth $695 million. Henrik Adam, chief executive officer of Tata Steel in Europe, said: "Today we are highlighting important proposals towards building a financially strong and sustainable European business. 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."
Henrik Adam, chief executive of Tata Steel's European operations, said: "We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks. However, today's proposal will be sad news for colleagues at Orb in South Wales. This is necessary, enabling us to focus our resources, including investment, on our core business and markets, helping us build a long-term sustainable future in Europe."
In September, Tata announced that it had failed to find a buyer for its Orb Electrical Steels business in Newport, South Wales, U.K. and its Wolverhampton Engineering Steels Service Centre, also in the U.K. Tata plans to close the Orb site with the loss of 380 jobs. It pointed out that Orb was losing money for several years as it "struggled to compete in the fast-moving market to supply steels used in electricity transformers in which customer requirements have out-stripped the site's capability." It said that converting the site to create steels for future electric vehicle production would cost in excess of £50 million ($64 million) in "a highly competitive market."
Tata's U.K plant closures and job cuts come at a difficult time for U.K. steel. Industrial Info recently reported that the U.K.'s second-largest steelmaker, British Steel Limited (BSL) (Scunthorpe, England), was to be saved by China's Jingye, which will invest £1.2 billion ($1.5 billion) to rescue the struggling company and save up to 4,000 jobs. For additional information, see November 18, 2019, article--British Steel Saved By China's Jingye.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
Half of the proposed job cuts will happen in the Netherlands and around two-thirds of all cuts will be office-based ("white collar") roles, the company said. The new round of cuts comes less than three months after Tata revealed plans to shut two U.K. operations with the loss of 400 jobs, blaming a failure to sell off its loss-making Orb Electrical Steels business in Newport, South Wales.
Tata claimed that the European market was now "a dumping ground for the world's excess steel capacity," thanks to stagnant European Union (EU) steel demand and global overcapacity as well as trade conflicts. It also blamed a significant increase in the cost of emission allowances, which has created "an urgent need for improvements" to the company's financial performance. Tata Steel is one of Europe's leading steel producers, with steelmaking in the Netherlands and the U.K., and manufacturing plants across Europe and a combined workforce of 21,000. However, in the first six months of its current financial year (starting April 2019), Tata Steel Europe reported a drop of 90% in earnings before interest, taxes, devaluation and amortization (EBITDA) to £31 million ($40 million). Revenue was £3.25 billion ($4.19 billion).
Industrial Info is tracking 14 Tata projects in Europe, all in the U.K. and the Netherlands, worth $695 million. Henrik Adam, chief executive officer of Tata Steel in Europe, said: "Today we are highlighting important proposals towards building a financially strong and sustainable European business. 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."
Henrik Adam, chief executive of Tata Steel's European operations, said: "We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks. However, today's proposal will be sad news for colleagues at Orb in South Wales. This is necessary, enabling us to focus our resources, including investment, on our core business and markets, helping us build a long-term sustainable future in Europe."
In September, Tata announced that it had failed to find a buyer for its Orb Electrical Steels business in Newport, South Wales, U.K. and its Wolverhampton Engineering Steels Service Centre, also in the U.K. Tata plans to close the Orb site with the loss of 380 jobs. It pointed out that Orb was losing money for several years as it "struggled to compete in the fast-moving market to supply steels used in electricity transformers in which customer requirements have out-stripped the site's capability." It said that converting the site to create steels for future electric vehicle production would cost in excess of £50 million ($64 million) in "a highly competitive market."
Tata's U.K plant closures and job cuts come at a difficult time for U.K. steel. Industrial Info recently reported that the U.K.'s second-largest steelmaker, British Steel Limited (BSL) (Scunthorpe, England), was to be saved by China's Jingye, which will invest £1.2 billion ($1.5 billion) to rescue the struggling company and save up to 4,000 jobs. For additional information, see November 18, 2019, article--British Steel Saved By China's Jingye.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
