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Investing.com -- Algoma Steel Group Inc (NASDAQ:ASTL) stock tumbled 7.6% on Monday after Bloomberg reported that the Canadian steelmaker will lay off 1,000 employees and close its blast furnace in northern Ontario within months, citing losses from US tariffs.
The Sault Ste. Marie-based company will also shut down its coke-making operation as it accelerates its transition to electric-arc furnace steelmaking by early 2026, a year ahead of schedule, according to a statement issued to Bloomberg.
Algoma directly blamed the Trump administration’s 50% tariffs on foreign steel for the drastic measures, stating these tariffs "have fundamentally altered the competitive landscape and sharply limited our ability to access the US market."
The company reported a 13% drop in sales during the third quarter, with direct tariff expenses reaching C$89.7 million. Algoma described the US steel market as "largely closed to us," prompting the Canadian and Ontario governments to provide C$500 million in emergency loans.
Currently employing approximately 2,500 workers, Algoma will implement the layoffs effective March 23, reducing its workforce by 40%.
"This transition is necessary to protect Algoma’s future in the face of these extraordinary and external market forces, and we will continue to advocate for a competitive and fair trading environment for Canadian steel," the company told Bloomberg.