Yahoo Finance Tata Steel to cut 3,000 jobs in Europe
Tata Steel said on Tuesday that it was planning to cut around 3,000 jobs in Europe as part of a cost-cutting initiative.
Though the company did not give a breakdown as to where in Europe the cuts would be made, it said that two-thirds of the losses would affect office-based workers.
“The programme is needed to ensure the business can thrive despite severe market headwinds which have led to a sharp decline in profitability,” Tata Steel said in a statement.
The move comes after the company in September said that it was proposing to close its Orb Electrical Steels plant in Newport in South Wales, with the potential loss of up to 400 jobs.
Tata Steel employs around 8,000 people in Wales.
READ MORE: Tata Steel to close South Wales plant, with 380 jobs at risk
It also comes after the European Commission, under anti-trust rules, chose to block a joint venture with Germany's Thyssenkrupp in May.
The Indian-owned company initiated an overhaul of its European business in June, which is affecting its steel-making plants in the Netherlands and Wales.
Tata Steel on Tuesday described the plans, which it said were needed to “urgently improve its financial performance to make sure the European business becomes self-sustaining and cash positive”, as ones that would help it combat “structural and cyclical headwinds”.
The news comes at a challenging time for the wider European steel industry, which is struggling with US tariffs on EU steel, Chinese competition, and high energy bills.
READ MORE: Chinese firm to buy British Steel for £70m
The decline of sterling since the Brexit referendum has also affected the UK industry. British Steel, which was sold by Tata for £1 in 2016, collapsed into administration in May, and was sold on to Chinese industrial conglomerate Jingye for £70m earlier this month.
Tata on Tuesday pointed to trade conflicts and overcapacity, and said that Europe had become “a dumping ground for the world’s excess steel capacity”.
The company said that this, coupled with weak economic growth, meant it was facing “unprecedented market conditions.”
Announcing the closure of the Newport plant in September, the company said that its Orb Electrical Steels business had been “loss-making for several years” and noted that it “struggled to compete in the fast-moving market to supply steels used in electricity transformers.”
