Indian owned Tata Steel has confirmed it will be cutting 3.000 jobs across Europe. A spokesperson for the company’s Central Works Council estimates that around 1.500 of these jobs will be from the Netherlands, although this has yet to be confirmed.
Tata Steel to cut jobs in order to reduce spending
Last month, a memo of Tata Steel’s plans to reduce spending in Europe was leaked to staff. The memo explained Tata’s plans to maintain positive cash flow and reduce costs in Europe by 830 million euros, 170 million of which had to be cut from personnel costs. Tata has since confirmed that 3.000 jobs will be axed across Europe. The company’s Central Works Council has estimated that 1.500 to 1.600 of these jobs will be scrapped in the Netherlands, however, Tata has not confirmed this figure.
Tata Steel employs 21.000 employees in Europe, 11.000 of which are in the Netherlands. The new CEO of Tata Steel Europe, Henrik Adam, has left workers from the company’s IJmuiden plant fearing the worst. “When it comes to performance, IJmuiden was a reference point in Europe…we have lost that position.” Some 9.000 people work at the IJmuiden plant and Tata also has branches in Maastricht, Oosterhout, Nieuwegein and Moerdijk.
Adam has stated that he is looking into new ways of working in order to increase productivity, reduce bureaucracy and increase steel sales with a higher sales value. The focus on reducing bureaucracy has been echoed by the Indian owners of Tata, who have stated that two-thirds of redundancies will come from office jobs.
Several factors affecting Tata’s performance in Europe
There are several worldwide factors that have impacted Tata’s performance in Europe. The automotive industry has been in hot water recently, recording declining sales. This directly affects Tata’s sales, as the main purchaser of steel from Tata’s IJmuiden plant is the automotive industry, followed by the packaging industry.
Chairman of the Central Works Council, Frits van Wieringen, has suggested that problems in the UK are responsible for the cuts. Tata steel in Britain has been making losses for some time. In response to this, van Wieringen has said, “it is important we reduce losses through investments in England” instead of exploring short-term solutions.
Also, following trade tensions between China and the US, President Donald Trump has protected the American Steel Industry by imposing high tariffs on foreign steel imports. This has resulted in cheap Chinese steel flooding the European market, providing a cheaper alternative to Tata Steel.