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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

Source: Reuters