Tata Steel's Corus Plc, Europe's second-largest steel company is planning a major revamp at Ijmuiden steel plant in the Netherlands, which could lead to nearly 1,000 workers losing their jobs due to decline in sales in the global steel industry, caused by the current economic slowdown.
The Federation of Dutch Unions, the FNV, said yesterday that the steelmaker in reorganising its operation in the Netherlands, may axe nearly 1,000 workers out of the 9,500 at Ijmuiden as the company hopes to save nearly €250 million.
The Corus union says it is not aware when and where the redundancies will take place but it assumes that many workers have nearly reached retirement age and they may be asked to leave among others.
According to the union, Corus has not responded to the FNV claims as it said that the plans have yet not been finalised.
Out of a total workforce of 9,500 at Ijmuiden, the 1,000 job cuts amounts to more than 10 per cent of its workforce and the union said that the number of job cut is extremely large.
Early last month, the company asked the Netherlands government for financial help from its €6-billion ($7.8 billion) economic bailout fund to help cut down on the work hours of nearly 4,600 employees, due to decline in sales in the global steel industry, caused by the current economic slowdown. (See: Corus to avail of government funds in Netherlands for 4,600 employees)
The Dutch government had announced a €6-billion ($7.8 billion) economic stimulus package, or 1 per cent of its GDP, to help the country cope with the global financial crisis. The government said that it would fund shorter working hours for companies whose sales have declined by 30 per cent since the past two months, through this package.
Under the scheme, Corus employees in the Netherlands will be paid 70 per cent of their wage as unemployment benefits by the Dutch government and Corus would pay the remaining 30 per cent over a period of six weeks.
In November, Corus had cut 400 jobs in its distribution business in the UK and Ireland operations, where the company employs 2,400 people across 36 sites (See: Corus raises production cuts to 30 per cent; axes 400 jobs).
Last month, workers at Corus in the UK, were reported to have voluntarily accepted a 10-per cent pay cut for six months to try and save the Llanwern, Newport factory in south Wales from closure, although a union spokesman has denied it. (See: Corus union denies workers taking pay cut)
According to the Financial Times, three unions representing Corus's 25,000 steelworkers had discussed the idea of voluntarily opting for the pay cut after having earlier agreed to lower overtime and bonuses.