Germany’s BASF (Badische Anilin- und Sodafabrik) has reached an agreement with employee representatives to avoid mandatory layoffs at its flagship Ludwigshafen facility through the end of 2028. The chemical company, as part of the agreement, will also invest €1.5 billion (approximately Rs 13,500 crore) every year at Ludwigshafen to upgrade infrastructure, increase production capacity and advance its long-term sustainability goals.
1.5 bn euros investment, no layoffs till 2028
This agreement will offer a sense of employment security to the employees who are at the core of the chemicals giant as it navigates a broader restructuring effort. It came as the existing job protection agreement will expire at the end of this year.
The deal, finalised after months of discussions with employee representatives – works council, will be in force for three years – from January next year to December 2028, the company said on Monday. Reuters reported that if profitability targets are met, the agreement will be extended for another two years.
Ludwigshafen, which serves as BASF’s headquarters and largest production hub, employs more than 30,000 workers, around one-third of the company’s global workforce.
The agreement comes at a time when the German chemical sector is struggling with subdued demand, high energy costs, supply chain issues and an economic slowdown. This was further worsened by US President Donald Trump’s tariffs.
Employee representatives welcome the agreement
Board member Katja Scharpwinkel said the agreement was the outcome of constructive talks between management and employee representatives.
“The new site agreement is the result of constructive negotiations between management and employee representatives,” she was quoted by Reuters as saying.
She noted that it strikes a balance by allowing the company to implement necessary changes while supporting efforts to restore competitiveness at the site, Reuters reported.
Sinischa Horvat, chairman of the Ludwigshafen works council, said that the outcome was far from guaranteed. “The tough negotiations were worth it. Given the persistent structural and economic challenges, this outcome was… by no means a foregone conclusion,” he said.
The labour pact comes as chief executive Markus Kamieth continues a sweeping transformation of the group. BASF plans to divest select businesses, pursue a public listing of its agricultural division in 2027, and has reduced shareholder dividends for the first time since 2010.
Alongside its restructuring in Germany, BASF is set to inaugurate a new site in China next year after investing about €8.7 billion (Rs 78,300 crore).
