Thyssenkrupp to slash roughly 10% of its workforce

The German conglomerate has continued to bleed cash in the current year.



Thyssenkrupp will slash 11,000 jobs, roughly 10% of its workforce, as the conglomerate’s ailing steel business bleeds cash. The pandemic has increased pressure on one of Germany’s biggest industry leaders to speed up the sale of underperforming units.

“We will have to move further into the ‘red zone’ before we have made Thyssenkrupp fit for the future,” Chief Executive Officer Martina Merz said. “The next steps could be more painful than the previous ones. But we will have to take them.”

The world’s tenth-largest steel producer is also writing down the value of its steel unit by more than $1.18 billion (1 billion euros), German-language business newspaper Handelsblatt report, citing company sources.

Thyssenkrupp is due to report annual results on Nov. 19. The embattled conglomerate is expecting an adjusted operating loss of 1 billion euros.

Earlier this year, Thyssenkrupp sold its elevator division to private equity firms for $20.4 billion (17.2 billion euros). The sale brought a new lease of life to the cash-strapped conglomerate. The payout was used to pay billions of euros in debt and fund pension liabilities.

If need be, the heavily unionized German conglomerate may even take to redundancies.

Even as one of Germany’s top industry leaders, Thyssenkrupp has continued to bleed cash in its remaining businesses. Free cash flow, excluding income from mergers, collapsed to negative $6.5 billion (5.5 billion euros) in its most recent financial years, which ran to the end of September.

The beleaguered conglomerate has cycled through three chief executives in 15 months. It is now under the new leadership of an outsider, former Bosch executive Martina Merz, who gave up the chairmanship of the company’s supervisory board to take over in October 2019.

It is now under the leadership former Bosch executive Martina Merz since October 2019. In May, Merz announced a deep restructuring plan that would result in smaller divisions – with combined sales of more than $7.10 billion (6 billion euros) a year and 20,000 employees. The remaining business units would run under a loose holding structure.

Today’s layoffs bring the total number of job cuts to 11,000. If need be, the heavily unionized German conglomerate may even take to redundancies.

“The next steps could be more painful than the previous ones,” Merz said, “but we will have to take them.”

In recent years, the German conglomerate has struggled to keep up with cheaper imports from Asia and elsewhere. This has results in a humungous business loss in the auto industry. The automotive sector, which is forecast to contract by almost a quarter in 2020, accounts for roughly 40 percent of Thyssenkrupp’s steel sales.

Avatar
Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes-Benz has unveiled a battery-powered luxury car as part of the brand’s flagship S-Class saloon, designed to compete with Tesla. The 2022 Mercedes-Benz EQS is set to relea
10 hours ago
Major US banks report surge in profits for the quarter

Major US banks report surge in profits for the quarter

Three major US banks —JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc.—reported earnings results for the first quarter of 2021.
10 hours ago
Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin price has once again soared over $63,000 USD as the cryptocurrency market braces for the upcoming Coinbase IPO. The San Francisco-based cryptocurrency exchange platform, wh
12 hours ago
Global ETFs reach a new record of $359.2bn in 3 months of ’21

Global ETFs reach a new record of $359.2bn in 3 months of ’21

Global economy recovery is well on its path going by the money being put in the exchange traded funds, especially in the last quarter. A trillion dollars has entered the traded fun
1 day ago
AppLovin gaming app goes public, valued at $28.6 billion

AppLovin gaming app goes public, valued at $28.6 billion

AppLovin Corp, the Palo Alto, California-based mobile app and gaming company, has priced its initial public offering at $80, which puts the company’s valuation at $28.64 billion.
1 day ago
JPMorgan earnings beat forecasts amid strengthening US economy

JPMorgan earnings beat forecasts amid strengthening US economy

JPMorgan Chase, the largest bank in America by assets reported favorable results on Wednesday, beating analysts’ estimates on trading revenue. It is the first major bank to repor
2 days ago