Tata Steel Europe said it had begun consultations with the European Works Council (EWC) on Wednesday on restructuring plans for its business, which would include up to 3,000 job losses – 1,000 of which will be in the UK. The job cuts had been announced by the Indian steel major last week as part of a wider transformation programme as it blamed ongoing losses and continued global headwinds faced by the steel industry.
“As part of the comprehensive set of proposals, Tata Steel Europe intends to lower employment costs,” the company statement said.
“This is expected to lead to an estimated reduction in employee numbers of up to 3,000, about two-thirds of which would be management and office-based roles. Up to 1,600 are expected in the Netherlands, 1,000 in the UK and 350 elsewhere in the world,” it said.
Tata Steel said it aims to build a financially strong and sustainable European business, able to make the investments required to accelerate innovation and the company's journey towards carbon-neutral steelmaking.
Tata Steel in Europe CEO, Henrik Adam, said: “I'm very proud to see the dedication of everyone in this business, determined to succeed even in the face of a very tough market. I also understand and appreciate colleagues’ concerns about these proposals.
“Change creates uncertainty, but we cannot afford to stand still as a company – the world around us is changing fast and we have to adapt. Our strategy is to build a strong and stable European business, capable of making significant investments needed for a successful future.”
During the meeting this week, which marked the official start of the employee consultation process with the EWC workers' unions, Tata Steel Europe said it had shared initial proposals about its transformation programme, focused across three other key areas besides lowering employment costs to improve the company's financial performance.
Increasing sales of higher-value steels by improving product mix and customer focus; efficiency gains by optimising production processes, supported by the application of big data and advanced analytics; and reduction of procurement costs through smarter sourcing and strengthening cooperation with companies within the Tata Steel group are among the other key focus areas of the company’s plans.
Tata Steel said it agreed with the EWC on a forward process and will meet again in the coming weeks to discuss further details, with employees and other stakeholders kept updated during the process.