Swedish steelmaker SSAB is planning temporary layoffs at its Finland facilities due to COVID-19’s impact on its production and finances.
The company has begun employer-employee negotiations as part of a mitigation plan to overcome its current constraints, it said in a press release. The announcement followed news of SSAB’s board of directors forgoing a dividend for the 2019 fiscal.
SSAB indicated that though the business had performed within its projected guidance in Q1 2020, the pandemic’s effects on global industrial production, weak market conditions, and consequences on the economy made SSAB’s future business outlook uncertain.
These challenges compelled the company to generate financial savings of around SEK 1bn ($99.4mn) annualized to accommodate for lessened demand, SSAB indicated in a statement.
To achieve this goal, the steelmaker will suspend steel production at its facilities in Borlänge and Hämeenlinna for a minimum of one week per month or even longer in April and May. Additionally, output from its blast furnaces will be cut down in line with market demand, the company indicated.
The new cost reduction actions will also affect many employees’ salaries, the company announced, including salaries of the group executive committee members who have agreed to reduce their pay by 10pc starting April 1.
The number of employees affected as well as the duration of the temporary layoffs will be decided during the negotiations.
($1 = SEK 10.05)