Steelmaker Corus cuts 3,500 jobs,extends outages
Corus, Europe's second biggest steelmaker, is cutting 3,500 jobs worldwide, mostly in Britain, as it restructures to battle a global downturn in demand from automotive and construction industries.business Updated: Jan 27, 2009 09:00 IST
Corus, Europe's second biggest steelmaker, is cutting 3,500 jobs worldwide, mostly in Britain, as it restructures to battle a global downturn in demand from automotive and construction industries.
The Anglo-Dutch steel group, owned by India's Tata Steel, also said its order book was down more than a third and it was to extend production cuts.
"The blast furnaces will be idled until into the second quarter of this year. It could be more... This will depend on the market. We're at a very low level of demand," chief executive Philippe Varin told reporters on Monday.
Corus wants to achieve the job losses, equivalent to 8.3 per cent of its workforce, through voluntary redundancies.
It is cutting 2,500 jobs in Britain as part of its plan to counter the downturn in the car and construction industries, which make up 50 per cent of it sales, and boost annual operating profit by 200 million pounds ($276 million).
Tata Steel shares fell 7.2 per cent in Mumbai trading, with the benchmark BSE index down 1.6 per cent.
After enjoying hefty profits in the first half of 2008, steel producers worldwide have had to slow production, cut jobs and shelve investment plans as demand has fallen sharply.
Steel prices have collapsed more than 50 per cent since mid-2008. For a factbox on cutbacks by major steelmakers click on
Measures announced by Corus on Monday include the proposed sale of a majority stake in its Teesside Cast products plant, and the mothballing of the hot strip mill at Llanwern in Wales.
Of the 2,500 job cuts in Britain, 1,100 will be lost in Wales and the rest in England, Varin said. Out of the 1,000 job cuts in continental Europe, 800 will go at it the IJmuiden plant, north Holland.
A spokesman for Britain's prime minister said Gordon Brown regretted Corus's decision. "The Department for Business, the Regional Development Agency and Job Centre Plus will do all they can to support the company and the redundant workers at this difficult time."
British unemployment has surged to nearly 2 million as firms lay off workers amidst the recession. [ID:nLK471868]
The Corus job cuts come as business minister Peter Mandelson is due to meet carmaker representatives for talks on possible measures to help the industry through the downturn.
Varin also said Corus was in ongoing talks with the British government over a wage subsidy scheme similar to that agreed in the Netherlands, adding: "We are not asking for a bailout".
Under the Dutch scheme, groups of Corus employees work shortened hours for a six-week period, receiving partial unemployment benefits from the government.