ThyssenKrupp will cut 11,000 jobs, roughly 10 per cent of its workforce, as the conglomerate’s beleaguered steel business hemorrhages cash and Germany’s government bickers over a possible rescue.
The steel and materials group almost doubled the number of positions it plans to eliminate after recording a 5.5-billion euro ($6.5 billion) net loss for the year that ended in September.
The company forecast another more than 1 billion euro deficit for the current period in a statement Thursday.
“We will have to move further into the ‘red zone’ before we have made Thyssenkrupp fit for the future,” Chief Executive Officer Martina Merz said. “The next steps could be more painful than the previous ones. But we will have to take them.” ThyssenKrupp shares fell as much as 7.6 per cent in Frankfurt trading. The stock has plunged more than 60 per cent since the start of the year.
Once synonymous with German industrial prowess, ThyssenKrupp is now fighting for survival. Its steel division faces severe problems with yawning pension deficits and cheap imports from Asia. The end game for the company is likely to involve a mix of asset sales, restructuring and the ignominy of a taxpayer bailout.