Tata Steel shares jump 6% on job cuts in the Netherlands

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The reorganisation of Tata Steel Nederland is expected to lead to a loss of around 1600 management and support function roles.
Tata Steel shares jump 6% on job cuts in the Netherlands
Shares of Tata Steel rose 6% to ₹134.95 on the BSE. Credits: Fortune India

Shares of Tata Steel Ltd rose 6% in intraday trade on Friday after India’s second-largest steelmaker announced its plans to cut 1,600 management and support function jobs in the Netherlands.

Tata Steel Nederland (TSN) said it will require a new and more effective organisational structure characterised by more accountability, standardisation, automation and elimination of duplication.

The Tata group company said the challenging demand conditions in Europe driven by geo-political developments, trade and supply chain disruptions and escalating energy costs have affected the operating costs and financial performance.

“This reorganisation is expected to lead to a loss of around 1600 management and support function roles. Certain changes are also being made in the local management board of TSN,” the statement said.

Reacting to the development, shares of Tata Steel increased 6% in intraday trade to hit a high of ₹134.95 on the BSE, lifting the company’s m-cap to over ₹1.67 lakh crore.

“Tata Steel remains committed to ensuring that its Netherlands operations achieve their potential of being one of the most competitive, successful and efficient in Europe. In order to achieve this, Tata Steel Nederland (TSN) has adopted a comprehensive transformation programme built on a multi-pronged approach of maximising production efficiencies, lowering fixed costs and optimising product mix and margins,” the steelmaker said.

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In the financial year 2024-25, the Netherlands operations have recovered with liquid steel production volumes near capacity at 6.75 MTPA, after the delayed reline of one of the blast furnaces had impacted production in FY24.

Tata Steel’s steel making operations at IJmuiden in the Netherlands constitute one of the most strategically located steel plants in Europe with its own deep-sea port and proximity to key customers. The access to offshore wind energy, transmission and pipeline infrastructure will enable the transition to competitive green steel making for which intense engagement is ongoing with all stakeholders including the Dutch Government.

“A Request for Advice for the transformation plan has been submitted to the Central Works Council and trade unions have been informed. Over the following weeks, an effective and comprehensive consultation process will be run on the proposed changes,” the company said.

“Together with my colleagues in Tata Steel and Tata Steel Nederland, we will ensure that Tata Steel Nederland returns to its pre-eminent position as one of the most efficient steel making sites in Europe, producing high-quality steel for our customers. We are working closely with the Dutch government and other stakeholders and are in constructive discussions about our joint investments in the Green Steel plan going forward,” said T. V. Narendran, Managing Director and CEO of Tata Steel and Chairman of the Supervisory Board of Tata Steel Nederland.

“This transformation is a building block towards this future where we ensure that TSN has the required robust operating and financial profile enabling it to move towards its future as one of the best and most sustainable steel companies in Europe,” said Narendran.

Tata Steel Nederland has an ambitious green steel transition plan under which one of the two blast furnaces will be replaced by a new Direct Reduced Iron furnace and Electric Arc Furnace by the end of this decade.

“As the Board of Directors of TSN, we are well aware that this intended restructuring of our organization may have a significant impact on our people, and we are committed to working closely with all stakeholders to navigate this difficult path. We have worked tirelessly in the past period to reduce costs and I am confident that we can once again deliver the changes required for a sustainable future- one where we achieve benchmark levels of profitability under all market conditions,” said Hans van den Berg, CEO of Tata Steel Nederland.

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