Global steel giant Tata Steel today said it is planning to cut up to 720 jobs, mainly at its UK facility, and will refocus on high-value segments like aerospace, as it tries to rebuild its business strategy to come out of the red.
The development comes a day after Tata Steel, one of the world’s top steel producers, settled its UK arm’s pensions dispute with trade unions that brought the firm to the brink of the biggest industrial dispute there in over three decades.
“Tata Steel today announced the next stage in its plans to refocus its speciality and bar business on high-value markets such as aerospace. The proposed changes would result in a reduction in employee numbers, mainly at its Rotherham-based bar business,” Tata Steel, parent firm of Tata Steel Europe, said in a BSE filing.
The company further said: “Tata Steel has identified 720 positions which will potentially become redundant. However, the company will work closely with those at risk and their trade union representatives to redeploy employees and minimise the number of compulsory redundancies.”
On the Rotherham-based bar business, the firm said it has been underperforming in the face of commodity grade steel being imported to the UK due to the strong pound and high electricity costs which are more than double those of key European competitors.
Chief Executive of Tata Steel’s European operations Karl Koehler said: “We have invested over 20 million pounds in the recent years in our speciality steel business.”
These investments have created a stronger and more technically advanced platform from which we can meet the needs of our customers, with an improved range and quality of products and services, he added.
“However, energy is one of our largest costs at our speciality and bar business and we are disadvantaged by the UK’s cripplingly high electricity costs.
“And while the UK government announced helpful measures to reduce the impact of its high energy taxes a few years ago, these measures still haven’t been introduced,” he said.
Tata Steel wants to play its role in reinvigorating the UK’s manufacturing industry, but increasing imports and high energy costs have further undermined the competitiveness of foundation industries, Koehler added.
Shares of the company today rose by 0.29 per cent to end at Rs 281.50 apiece on the BSE.