Outokumpu Completes Employee Negotiations, Targeting Up to 1,000 Job Cuts
Outokumpu Oyj has finalized employee negotiations in several operating countries, aiming for cost savings through restructuring and a workforce reduction of approximately 1,000 employees.
Outokumpu Oyj announced the completion of employee negotiations that began in November 2020 across selected operating countries. The restructuring initiative targets cost savings by reducing the company's total headcount by approximately 1,000 employees.
As a result of the negotiations, Outokumpu will reduce its workforce by 250 employees in Finland, 230 in Germany, and 170 in Sweden. Further personnel reductions, estimated at around 250 employees, are underway in the company's European and American operations. The full target reduction of 1,000 employees is expected to be completed, primarily by the end of 2021. Outokumpu aims to operate with a headcount below 9,000 by 2022.
The company cites a challenging market situation, characterized by continued high import pressure in Europe and the global economic impact of the COVID-19 pandemic, as the reason for ensuring cost competitiveness by cutting fixed costs, a significant portion of which are personnel expenses.
These reductions are part of Outokumpu's strategy to achieve financial targets for its first phase, including a EUR 200 million improvement in EBITDA run-rate and a net debt to EBITDA ratio below 3.0x by the end of 2022. The personnel reductions are projected to yield annual savings of approximately EUR 70 million, with EUR 60 million directly from personnel costs. Restructuring costs are estimated at EUR 75-80 million, with the majority of cash outflow expected during 2021.