Tata Steel may cut around 500 jobs in UK

Written by Promit Mukherjee | Mumbai | Updated: Oct 30 2013, 05:53am hrs
Tata Steel
Eight out of every hundred people working in Tata Steel Europes long products facility will lose their jobs soon as a recovering Europe does not offer any respite to the companys business.

In a statement issued on Tuesday, the company said it was looking at restructuring its long products business in the United Kingdom, which would include downsizing almost 500 people from the management and administrative functions. This will mainly include people working in its Scunthorpe facility and its Teeside and Workington sites.

About 340 positions could be affected in Scunthorpe, 90 in Workington and 40 in Teeside, said a company note.

Reliable sources say the company currently runs 3.2 million tonne of long products facility at Scunthorpe and employs about 6,250 people across its entire long products business, primarily spread around the three sites.

Since January 2007, the Scunthorpe facility has seen its output come down from 4.2 million tonne to 3.2 million tonne, a drop of 31% due to tepid market conditions in Europe.

The proposals (to restructure) 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, said the company note.

Karl Koehler, CEO of Tata Steels 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.