ThyssenKrupp AG announced on Thursday it would eliminate 11,000 jobs or 10% of its workforce as the company faces structural challenges in its steel business, according to the company’s press release. The steel and materials group recorded a 5.5 billion euros net loss for the year ended in September. The company forecasts more than a 1 billion euro deficit for the current period.
- Analysts expect a range of measures, including a mix of asset sales, restructuring, and a taxpayer bailout to save the company.
- ThyssenKrupp’s management has held talks with potential buyers and merger partners to address overcapacity for the steel unit.
- The company has also approached the German government for about a 5 billion euros aid package.
- Thyssenkrupp’s steel division has been facing problems of rising pension deficits and cheap imports from Asia.
- The company has also endured years of management departures and clashes with activist investors Cevian Capital AB and Paul Singer’s Elliott Management Corp.
- This year, ThyssenKrupp sold its elevator division for 17.2 billion euros and now has 13.2 billion euros cash and undrawn credit lines.
- Thyssenkrupp expects to make a “fundamental” decision in the spring on solving its steel business woes.
- Despite the company projecting sales growth in the low to the mid-single-digit range after a 15% contraction last year, it expects an adjusted EBIT loss in the mid-three-digit million-euro range.
ThyssenKrupp stock is currently declining. TKA is down 7.14%