4,000 jobs to be cut in Europe as a result of the merger of Tata Steel and Thyssenkrupp

Even as the two major players Tata Steel and Thyssenkrupp seek synergies, which are likely to emerge after they merge to form the second largest European steelmaker under the merger agreement, 4,000 jobs in Europe will be cut.

According to the Memorandum signed by the companies, the new organization, which will be called Thyssenkrupp Tata Steel, will cut about 4,000 jobs - about 8 percent of the total number of employees before the merger of both sheet metal factories. The companies now employ about 48,000 workers. The job cuts will be equally distributed among the companies.

Earlier, workers' representatives, who hold half of the seats on Thyssenkrupp's supervisory board, also expressed concern about job losses. Tata Steel overcame this barrier after the UK regulator approved a deal to address a protracted standoff over the pension issue.

According to Thyssenkrupp, the European steel sector is experiencing structural overcapacity and ever-increasing import pressures. “Consequently, all producers are under pressure regarding capacity utilization and are forced to resort to profit restructuring again and again. The result is a downtrend and a need for restructuring approximately every three to four years, with major steel assets threatened with closure in the medium term, ”Thyssenkrupp said.

The headquarters of the new company is located in Amsterdam (Netherlands). According to the company, the cost optimization of the company, which produces, among other things, steel sheet, is expected to be in the range of 400-600 million euros per year. “Cost synergy can be realized through the integration of commercial functions, R&D and other support activities,” said Koushik Chatterjee, CEO of Tata Steel Group. The job cuts feared by unions at ThyssenKrupp and German officials will be split roughly equally between the two groups.