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Investing.com -- Thyssenkrupp’s (ETR:TKAG) shares fell over 6% on Wednesday after the head of its steel division said the group’s sweeping restructuring, involving roughly 11,000 jobs to be cut or outsourced, will carry a mid-three-digit million-euro price tag.
Marie Jaroni, who leads the German industrial engineering and steelmaker’s core steel unit, told the Frankfurter Allgemeine Zeitung that the planned shake-up reflects the scale of transformation required in the business.
Earlier in the week, Thyssenkrupp Steel Europe announced that it had reached an agreement with the IG Metall union to reduce its workforce by 40% and scale back production capacity to between 8.7 million and 9 million tons of shipments, down from the current 11.5 million.
“The restructuring is costing us a mid-three-figure million euro sum. The exact amount depends on how many employees accept which offer,” Jaroni said in the interview.
She added that the overhaul will be financially worthwhile because personnel expenses will drop permanently, noting that the company expects “a low three-digit million amount less annually than today.”
Thyssenkrupp has long sought to divest its steel operations, and in September it received an indicative offer from India’s Jindal Steel International for TKSE.
Jindal is now conducting detailed due diligence to determine whether it will proceed with a binding proposal for the division, which generated €10.7 billion in sales last year, making it Germany’s largest steel producer.