Germany’s thyssenkrupp, will reduce jobs and invest €4.2bn euros ($4.5bn) in its steel division by 2026, the company announced on Wednesday.
The steelmaker reached an agreement with labor union, IG Metall, to implement its steel strategy with a focus on long-term competitiveness, thyssenkrupp indicated.
The company announced it intends to strengthen the integrated Duisburg production site as units are closed at other locations. To achieve this goal, it will cut around 2,000 jobs over the next three years and about 1,000 more by 2026 at its struggling steel unit.
The collective agreement with the union applies to thyssenkrupp’s German steel locations and will run from April 01, 2020 through March 31, 2026. The job cuts entail around 1,000 administrative positions, 800 in the heavy plate segment and about 1,200 through adjustments in the production network.
thyssenkrupp’s steel strategy also provides support for an investment of about €800mn euros over six years, adding to its annual investments of about €570mn included in the plan.
These actions follow the sale of the company’s elevator division, also part of the conglomerate’s strategy to make its steel production business more viable against competitors such as ArcelorMittal and Voestalpine.
The deal also contains an immediate COVID-19 pandemic package that includes reduced working hours, steel production adjustments and to extend short-time work pay to 80pc of wages at thyssenkrupp Steel Europe, the company said.
The company withdrew its H2 2020 profit outlook Monday, due to COVID-19 related economic downturn.