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German chemicals giant Evonik says 7,000 jobs on the line.
A major restructuring and cost-cutting operation at Evonik, a publicly-listed German specialty chemicals company, could reduce its workforce by one-fifth.
Based in Germany’s industrial heartland, chemicals company Evonik wants to sell its business units, including infrastructure at several sites, it announced on December 13.
Instead of its current four divisions, where today a total of 32,000 people work, it will cut that to two, losing 7,000 employees, more than double what was previously announced.
The Evonik supervisory board has approved the restructuring proposal of CEO Christian Kullmann, the largest in the company’s history.
“We have significantly improved the quality of our portfolio in recent years,” Kullmann said. Now a new structure is necessary: “Under one roof, we use the strengths of our two pillars.”
In March, the company had announced it would cut 2,000 jobs by 2026 and reduce costs by €400 million.
A lot of those were aimed at the management level. Evonik said it wanted to reduce the number of management boards across the group from an average of 10 to a maximum of six by the end of 2026.
Some 500 of the previously announced 2,000 cut jobs were in management positions. In addition, 1,000 of the 4,500 managers will have management tasks removed but can continue to work operationally – with adjusted salaries, news outlet Nius reported.
High energy costs and inflation have hurt the German chemicals industry, pushing up production costs.
Evonik said it expected to make a profit this year but sales have plummeted. In 2023, they dropped by 17 per cent and the company earned €1.7 billion, down from €2.5 billion the year before.
Evonik produces a wide range of specialty chemicals and materials for various industries and applications such as methionine, an essential amino acid used in animal feed. It also makes hydrogen peroxide, used as a bleaching and oxidising agent in the paper, cosmetics, and textile industries and Aerosil®, an extremely fine filler used in paints, coatings, rubber, silicone rubber and various everyday products.
The company was involved with the development of Covid-19 vaccines, particularly in the production of essential components for mRNA-based vaccines.