BASF plans to cut 6K jobs as chemical demand slows
Houston may be hit with company’s layoffs
BASF SE plans to cut 6,000 jobs worldwide in the face of a slowdown in demand for chemicals, unveiling the headcount reduction on the same day as Ford Motor Co. said it would eliminate a fifth of its workforce in Europe.
BASF’s trimming of about 5 percent of the payroll — half at home in Germany — will generate savings of $341 million, the Ludwigshafen-based company said in a statement on Thursday. The shares gained 1.6 percent in Frankfurt.
The overhaul at BASF came on the heels of Ford’s announcement of job cuts aimed at tackling falling sales in the region and weak profitability. The moves underscore a drop in June of Euro-area economic confidence to its lowest level since 2016 as deepening trade tensions and a more cautious outlook for the global economy weigh on business and consumer sentiment.
BASF’s decision also comes at a time when demand for chemicals is falling at a range of industries from cars to electronics. Earnings at chemical producers including HB Fuller Co. and Lyondell-Basell Industries NV have already revealed weaknesses in sectors such as coatings and plastics. The BASF job cuts are part of Chief Executive Officer Martin Brudermueller’s plan to boost earnings by $2.27 billion through a simplification of the world’s biggest chemicals company. He also plans to sell more highermargin products rather than simply delivering barrels of basic chemicals.
BASF employs about 2,000 people in Greater Houston, in
cluding nearly 1,000 in Freeport, almost 500 in Beaumont and Port Arthur, 350 at its regional headquarters in Houston’s Energy Corridor and nearly another 200 people at its smaller petrochemical plants in Houston and Pasadena. BASF has more than 17,000 employees in North America and nearly 120,000 people worldwide.
It’s unclear how many Houston-area jobs might be cut.
“We don’t have details of how this will fully roll out in the region,” said BASF spokeswoman Donna Jakubowski, noting that the reorganization is early in the decision-making process.
In addition to the cuts, BASF also plans to make 29,000 jobs more flexible through the deployment of engineers, digital experts and other employees to different sites or business units when needed. The modification represents a sweeping change to BASF’s work culture, where personnel have traditionally been assigned to specific units.
Talks on a labor deal at BASF’s flagship chemical complex in Ludwigshafen will get underway earlier than planned, the company said. German engineering giant Siemens AG is also eliminating jobs in the country at its power division, having undertaken months of negotiations with labor unions to hammer out a deal.