Thyssenkrupp plans 5,000 more job cuts, with steel branch in jeopardy

Thyssenkrupp was already undergoing a difficult restructuring process and had slashed 6,000 jobs last year. The coronavirus pandemic has been "a massive stress test" for the company, CEO Martina Merz said.

German steel giant Thyssenkrupp said on Thursday that it would slash 5,000 more jobs, as the coronavirus pandemic has taken a toll on the company. Thyssenkrupp group was already struggling before the epidemic hit Germany.

The group, which employs more than 100,000 people, said the new round of layoffs will take place over the next three years.

The announcement came on the heels of the company slashing some 6,000 jobslast year. In total, the downsizing will now impact 11,000 positions in total, 3,600 of whichare already gone.

Read more: Opinion: Are the good years over for German firms?

Thyssenkrupp shares, which have lost almost 60% of their value over the year, were down almost 4% in early trading on European stocks.

The pandemic has caught the company at a difficult time, as it was undergoing major restructuring and forlornly seeking to offload what was once its core business, steel manufacturing. "We are in the middle of the biggest restructuring process since Thyssenkrupp was founded. This includes further job cuts, but unfortunately there is no way around them," explained Personnel Director Oliver Burkhard.

"The coronavirus pandemic is a massive stress test for Thyssenkrupp. Our top priority remains the protection of our employees and our businesses," said Chief Executive Officer Martina Merz.

"Despite the headwind, we have achieved important milestones in the transformation of the group," Merz said in a statement."We are still not where we need to be. The next steps could be more painful than the previous ones. We will still have to take them," she added.

Read more: Thyssenkrupp steel feels the heat as European industry finds itself at decisive moment

The news of the layoffs was compounded by the release of an annual report that revealed an operating loss of €1.6 billion for 2019/2020. The steel division accounted for €946 million of the loss. Only the naval division posted a positive operating result, a meager €13 million. The sale of Thyssenkrup's elevator division for €15 billion also provided some breathing room.

While the company expects operating losses to narrow by next September, it still predicts losses in the nine-digit range for the new fiscal year 2020/2021.

Thyssenkrupp indicated that it would seek partners to help shore up steel operations.

Already, some potential partners are lining up. Britain's Liberty Steel, founded and led by SanjeevGupta, made an offer for the group's steel activities last month.

There have also been discussions with Sweden's SSAB and India's Tata Steel. But unions representing Thyssenkrupp staff are also pushingfor state support.A previous planned merger with Tata was shot down by EU anti-trust regulators in 2019.

jcg/msh(dpa, AP)

Thyssenkrupp's steel workers were protesting a month ago, calling for a government rescue as the hunt for a buyer faltered