Thyssenkrupp Stock: Massive Cuts Target Survival

Germany's largest steel producer has negotiated a restructuring agreement with the IG Metall union lasting until 2030, involving significant workforce sacrifices and operational downsizing. The deal includes reducing weekly working hours to 32.5 hours, eliminating holiday bonuses, and implementing approximately 8% income reductions across the board. These measures aim to decrease personnel costs by hundreds of millions annually. Thyssenkrupp plans to dramatically reduce its steel production capacity from 11.5 million tons to between 8.7 and 9 million tons, necessitating extensive job cuts. The company will eliminate 5,300 positions directly - 1,600 in production through facility closures by 2029, and another 3,700 across all divisions by 2028. An additional 4,000 employees will be transferred through divestments, potentially shrinking the workforce from 26,300 to fewer than 16,000 by 2030.

Strategic Facility Realignment

The restructuring significantly impacts the company's manufacturing footprint, with complete closure of the Bochum facility scheduled for 2028. The initially threatened Kreuztal-Eichen plant received a temporary reprieve through a planned optimization program. The drastic measures come as Thyssenkrupp battles multiple challenges including economic weakness, soaring energy costs, and aggressive low-cost imports from Asia. While aiming to avoid compulsory redundancies, the implementation costs for severance packages will be substantial. The restructuring agreement still requires approval from union members and financial backing from Thyssenkrupp's parent company to proceed.

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Source StockWorld