Thyssenkrupp Proposes 11,000 Job Cuts at Struggling Steel Unit

Thyssenkrupp AG’s steel unit plans to eliminate or outsource 11,000 jobs this decade, a move that would shrink a business that’s lost billions of euros to a global steel glut and rising energy prices.

The steel division’s board has proposed cutting 5,000 jobs while moving another 6,000 positions to external service providers, the company said Monday. The company aims to lower personnel costs by about 10% on average over the coming years.

The company, which employs around 27,000 people, is currently in talks with Czech billionaire Daniel Kretinsky’s EP Corporate Group about the investment group increasing its shares in the steelmaker to 50% from 20%.

Thyssenkrupp’s steel unit has repeatedly failed to break even due to high investment requirements and low steel prices, weighing on the company’s overall earnings. High energy prices stemming from Russia’s invasion of Ukraine and rising interest rates have also increased costs for the division. The company’s high pension obligations have also proved a stumbling block in talks with potential buyers.

Once synonymous with German industrial prowess, Thyssenkrupp is undergoing a restructuring after several challenging years. While the company successfully sold its elevator division for €17.2 billion ($18 billion) in 2020, its cash pile has dwindled, partly due to a series of losses and writedowns at its steel division.

“Increasingly, overcapacities and the resulting rise in cheap imports, particularly from Asia, are having a significant impact on competitiveness,” Thyssenkrupp said in a statement.