Outokumpu to cut 10% of workforce, mostly Europe

Outokumpu is starting the negotiation processes to cut its total global workforce by some 1,000 units (some -10%) by the end of 2021.

In a note seen by Kallanish, the company notes that negotiations will commence immediately. Most cuts will be in Finland (270), Germany (250) and Sweden (190). Further reductions are also planned across European and Americas operations.

“Due to the challenging market situation with continuing high import pressure in Europe and the Covid-19 pandemic impacting the global economy, it is crucial to ensure the company’s cost competitiveness by reducing fixed costs, of which personnel expenses are significant part,” Outokumpu observes.

The company posted recovering results in the third quarter compared with Q2, but they remained below Q3 2019. Q3 net loss was €63 million ($74.5m), against a loss of €27m in Q3 2019.

Looking ahead the company remains cautious for Q4. “As communicated previously, the Covid-19 pandemic is expected to have a significant impact on the stainless steel industry throughout 2020, and increases uncertainty. Outokumpu expects its stainless steel deliveries for the whole group to remain stable in the fourth quarter compared to the third quarter,” the company comments.

The firm’s American business is developing in the right direction, while in Europe persistent pressure from Asian imports is still seen by the company as a threat.