Thyssenkrupp slashes another 5,000 jobs to 'stop the bleeding'

By Christoph Steitz and Tom Käckenhoff FRANKFURT/DUESSELDORF (Reuters) - German conglomerate Thyssenkrupp plans to cut another 5,000 jobs to stem losses across its sprawling empire, it said on Thursday, after reporting its operations were 1.6 billion euro ($1.9 billion) in the red in the latest financial year. Despite closing the sale of its elevators business in July for more than 17 billion euros to help fund restructuring and cut debt, the group remains in crisis and CEO Martina Merz said more painful restructuring will be needed to stop burning cash.

Reuters November 20, 2020 00:06:30 IST
Thyssenkrupp slashes another 5,000 jobs to 'stop the bleeding'

Thyssenkrupp slashes another 5000 jobs to stop the bleeding

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) - German conglomerate Thyssenkrupp plans to cut another 5,000 jobs to stem losses across its sprawling empire, it said on Thursday, after reporting its operations were 1.6 billion euro ($1.9 billion) in the red in the latest financial year.

Despite closing the sale of its elevators business in July for more than 17 billion euros to help fund restructuring and cut debt, the group remains in crisis and CEO Martina Merz said more painful restructuring will be needed to stop burning cash.

The company said it expected to make a decision about what to do with its struggling steelmaking business in the spring of next year after the division swung to a loss of nearly a billion euros as the global slowdown from COVID-19 lockdowns hit demand.

"We're not yet where we need to be. The next steps could be more painful than the previous ones. But we will have to take them," Merz said. "Our key message to the capital market is this: (we will) stop the bleeding."

Thyssenkrupp said its adjusted operating loss would narrow in the year through September 2021 to the low hundreds of millions of euros though it would still have negative cash flow from ongoing businesses of about 1.5 billion euros.

Shares in the company, which have already fallen about 60% this year, slumped nearly 10% with analysts saying the outlook for the coming year was disappointing.

"PAINFUL TO WATCH"

The new job cuts come on top of 6,000 layoffs announced last year, taking the total number to 11,000 but drawing criticism from some investors, including No.2 shareholder Cevian, that the group's restructuring is too slow and not radical enough.

"The elevator division was sold to be able to fundamentally fix the other businesses. Not enough has happened since," Friederike Helfer, partner at Cevian and a member of Thyssenkrupp's supervisory board, said.

"It's painful to watch, because it doesn't have to be like this."

However, Juergen Kerner, Thyssenkrupp's deputy supervisory board chairman and chief treasurer of Germany's biggest union, IG Metall, said that the key was to avoid forced layoffs and maintain sites and jobs.

"We reject sweeping, group-wide reduction programmes."

Thyssenkrupp, which also makes ships, car parts and trades in industrial materials, has already shed 3,600 jobs since announcing the first cuts last year.

That means another 7,400 will have to go over the next three years, accounting for 7% of a total workforce of 104,000.

Thyssenkrupp tried to set up a joint venture for its steel business with India's Tata Steel but it was blocked by Brussels on antitrust grounds last year. It has also held talks with Swedish steelmaker SSAB and is currently reviewing a non-binding indicative offer from Britain's Liberty Steel.

(Editing by David Clarke and Susan Fenton)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.