Germany’s ThyssenKrupp cuts jobs, production amid demand drop

German steelmaker ThyssenKrupp on Wednesday brought its proposed steel restructuring plan forward in light of declining demand amid the coronavirus pandemic and announced 3,000 job cuts, of which 800 will be at its heavy plate business.

“At present the coronavirus pandemic is leading to a sharp decline in customer call-offs and a deterioration in the order situation. Thyssenkrupp is therefore going to make production adjustments in the steel business at short notice,” it said.

An immediate “coronavirus package” also includes the requirement to increase compensation for reduced hours to 80%.

“We will have to begin reductions in our operations at many locations in the coming weeks. This will initially affect production-related areas, but also administration. We are taking a close look at all areas to see when which measures make sense,” said Oliver Burkhard, executive board member for human resources and labor director.

As part of the restructuring plan, Thyssenkrupp said it will be cutting 3,000 jobs in total over the coming years, the majority of which will be administrative positions, but 800 will be in its heavy plate production operations.

Thyssenkrupp did not respond to an S&P Global Platts request for more details on the production cuts Wednesday.

“We have put off problems for too long and shied away from tough decisions,” said Klaus Keysberg, the member of the executive board in charge of steel.

The restructuring will involve a combined investment of Eur800 million over the next six years in addition to Eur570 million annually in spending to move production to higher grades of steel.

Thyssenkrupp scrapped its outlook for the business year earlier this week in light of the pandemic.

Also Wednesday, German steel stockholder Kloeckner said it would not be able to maintain expectations for 2020 and that there would be a temporary reduction in operations via reduced working hours.

— Laura Varriale