German conglomerate Thyssenkrupp plans to cut another 5,000 jobs to stem losses across its sprawling empire after posting a 1.6 billion euro ($1.9 billion) operating loss in its latest financial year, the company said on Thursday. The company said it expected to make a decision about what to do with its struggling steelmaking business in the spring of next year after the pision swung to a loss of nearly a billion euros as the global slowdown from COVID-19 lockdowns hit demand.
“We’re not yet where we need to be. The next steps could be more painful than the previous ones. But we will have to take them,” Chief Executive Martina Merz said in a statement. Thyssenkrupp said its adjusted operating loss would narrow in the year through September 2021 to the low hundreds of millions of euros though it would still have negative cash flow from ongoing businesses of about 1.5 billion euros. Shares in the company, which have already fallen about 60% this year, slumped more than 7% with analysts saying the outlook for the coming year was disappointing.
The new job cuts come on top of 6,000 layoffs announced last year, moves that have angered powerful labour representatives on the company’s board. “We reject sweeping, group-wide reduction programmes. For us, it’s about preventing forced layoffs and maintaining as many sites and jobs as possible,” said Juergen Kerner, chief treasurer of Germany’s biggest union, IG Metall, and Thyssenkrupp’s deputy supervisory board chairman.
Thyssenkrupp, which also makes ships, car parts and trades in industrial materials, has already shed 3,600 jobs since announcing the first cuts last year. That means another 7,400 will have to go over the next three years from a total workforce of 104,000. To help fund its restructuring efforts and cut debt, Thyssenkrupp sold its elevators business to private equity firms last year for more than 17 billion euros though Merz said in October that the company was still in a difficult situation.
It tried to set up a joint venture for its steel business with India’s Tata Steel but it was blocked by Brussels on antitrust grounds last year. Thyssenkrupp, which has also held talks with Swedish steelmaker SSAB, is currently reviewing a non-binding indicative offer from Britain’s Liberty Steel.