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Tata Steel Europe to cut 3000 Jobs

Steel News - Published on Tue, 19 Nov 2019

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Tata Steel outlined proposals for a transformation program in Europe. It said “The program is needed to ensure the business can thrive despite severe market headwinds which have led to a sharp decline in profitability. At the same time, it aims to secure the foundation for investments required to accelerate innovation and the company’s journey towards carbon-neutral steelmaking. The plans include a proposed new way of working to boost productivity and reduce bureaucracy as well as a focus on increasing sales of higher-value steel products and solutions.”

The program is focused on four areas to improve financial performance

Increasing sales of higher-value steels by improving product mix and customer focus

Efficiency gains by optimizing production processes, supported by the application of big data and advanced analytics

Lowering employment costs, leading to an estimated reduction in employee numbers of up to 3,000 across Tata Steel Europe’s operations, about two-thirds of which are expected to be white collar roles

Reduction of procurement costs through smarter sourcing and strengthening cooperation with companies within the Tata Steel group

Through its proposed transformation program, Tata Steel Europe is initially targeting a positive cash flow by the end of its financial year ending March 2021. It is also aiming for an EBITDA margin of around 10% throughout the market cycle. Based on full year 2019 revenue figures, this would equate to GBP 750 million in EBITDA. With improved earnings and cash flows, Tata Steel Europe will be a financially self-sustaining business able to invest in asset reliability and improvements while also servicing its financial obligations to its lenders and shareholders.

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Posted By : Rabi Wangkhem on Tue, 19 Nov 2019
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