BASF will cut 6,000 jobs worldwide, mainly involved in its central administration, in a move it said will achieve annual savings of 300 million euros ($341 million) from 2021 and give more power to customer-facing executives.
Chief Executive Martin Brudermueller, who took over little over a year ago, is seeking to refashion the German chemical industry giant, which has until now relied on cost efficiencies from mass production, to react more quickly to customer demands.
“The role of regions and countries is being sharpened. They represent BASF locally and support the growth of business units with local proximity to customers,” BASF, which has more than 120,000 staff, said in a statement.
BASF, a maker of petrochemicals, coatings, catalytic converters and foams, last month said it was aiming for growth in 2019 operating profit at the lower end of a 1-10% range, despite analyst predictions of a decline in full-year earnings.
It has warned the forecast could be in danger if trade disputes continue to be a drag on global markets, but a spokesman said the job cuts were driven by longer-term considerations and had nothing to do with the business cycle.
The cutbacks and savings target are part of a restructuring program unveiled in November, with 2 billion euros in annual contributions to earnings before interest, taxes, depreciation and amortization (EBITDA) from 2021 onwards.
BASF said about half of the cutbacks would be in Germany, with most of these at its Ludwigshafen headquarters.
It will start talks with German shop stewards over a follow-on deal to an existing agreement on job security in Ludwigshafen that will run out at the end of next year.
By Ludwig Burger
BASF will build a commercial scale battery recycling black mass plant in Schwarzheide, Germany. This investment strengthens BASF’s cathode active materials (CAM) production and recycling hub in Schwarzheide. The site is an ideal location for the build-up of battery recycling activities given the presence of many EV car manufacturers and cell producers in Central Europe.
Clariant says it is reducing its number of businesses from five to three, by merging units, under a reorganization that is in line with the company’s purpose-led strategy and cultural transformation. The moves will position Clariant for long-term sustainable growth, the company says.
Chemicals & plastics industry has the most diversified end-use market across all manufacturing industries. The industry returned to growth in 2021 but a supply chain crunch prevented it from becoming stronger. The market is likely to stabilize in the second half of 2022 with a supply-demand balance.