Tata Steel Europe to restructure, cut 500 jobs

Tata Steel Europe on Tuesday announced a major restructuring of its long products business at Scunthorpe, Teesside and Workington in the UK to strengthen its competitiveness.

The proposed reorganisation, involving mostly management and administrative functions, could lead to the loss of around 500 jobs, Tata Steel said.

About 340 positions could be affected in Scunthorpe, 90 in Workington and 40 in Teesside, Tata Steel said in a release.

The proposals come amid a prolonged downturn in demand for some of the key products made by the Scunthorpe-based business, including the UK market for construction steel, which is about half of 2007 levels.

Karl Koehler, CEO of Tata Steel's European operations, said, "European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years.

"On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry," Koehler said.

"As difficult as the proposed changes are, they are intended to build a stronger future by enabling the 'long products' business to compete in even the current challenging economic and regulatory conditions.

"We will of course engage fully with employees, trade unions and our political stakeholders during this restructuring process. We will do everything we can to support our employees through this unsettling time," he added.

Michael Leahy, general secretary of community and chair of the UK Steel unions' Committee said, "We are obviously very concerned to hear this news and are doing all we can to support those affected by the announcement.

"We recognise the business has been dealing with a downturn in some of its markets for the past five years. Nevertheless, today's news once again reflects the fragile state of our economy and the lack of any real impetus by government to support our manufacturing base.

"Community is seeking an urgent meeting with the company to get their agreement to extending the consultation period to allow for all alternatives to be explored and also to reiterate community's opposition to any compulsory redundancy."

In addition, Tata Steel's subsidiary UK Steel Enterprise will look at how it can provide more support to the local communities affected by today's announcement and help stimulate new job creation in those areas.

UK Steel Enterprise will now start a consultation process with affected employees and their representatives.

Tata Steel said it would make every effort to achieve the job losses through voluntary redundancies, though it is important that critical skills are retained. For those rendered surplus, the company said, it would make available a comprehensive range of redundancy packages and outplacement support services.

With the main steelmaking operations in the UK and Netherlands, the European operations of Tata Steel are Europe's second-largest steel producer, supplying steel and services to the construction, automotive, packaging, rail, lifting and excavating, energy and power, aerospace and other markets worldwide.

Tata Steel Group is one of the world's largest steel producers, with an aggregate crude steel capacity of more than 29 million tonnes and approximately 80,000 employees across five continents.