Tata Steel Europe is planning to cut 1,250 jobs as it faces “challenging circumstances” and “needs to urgently improve profitability”, Chief Executive Officer Henrik Adam said in an internal memo seen by Reuters news agency on Tuesday.
“Our financial situation is serious and there’s an urgent priority to improve the performance of the business and our cash position,” Adams said in the memo.
Besides the job cuts, which would be less than half of what the company had announced last year, Tata Steel said it will not replace employees who have retired or left the company.
It had in November decided to cut 3,000 jobs across its European business. The steelmaker said it expected to cut up to 1,600 jobs in the Netherlands, 1,000 in the United Kingdom and 350 elsewhere.
The company has outlined details of a transformation programme and continues to be in talks with its European works council to minimise job losses, according to the memo.
“Although it’s good news that we are able to minimise the impact on our current employees, we need to progress with speed to secure the future for the business,” Adam said.
In response to the Tata Steel’s plans, UK’s Unite union has called for “urgent talks” with the company to discuss the implication on the company’s UK operations, including the Port Talbot site in South Wales.
“Although the figure for possible job losses across Europe now appears to be smaller than originally thought, we will campaign against any job losses. We don’t believe that the company’s plans, which are centred on cost-cutting, are the answer,” said Tony Brady, Unite officer with national responsibility for Tata Steel.