SABIC to cut over 1,000 jobs in Europe

Petrochemicals giant Saudi Basic Industries (SABIC) has announced plans to cut about 1,050 jobs in Europe and close some operations as part of a restructuring operation brought about by a gloomy business outlook.

SABIC relies heavily on gas to power its plastics and chemicals businesses, and has been impacted by a North American shale gas boom has cut prices to half European levels. Also, lower consumer spending on houses, cars and appliances and less investment on infrastructure in Europe was cutting demand and squeezing margins, The Netherlands-based SABIC said.

“Competition has intensified from other regions, especially from the United States, which has the advantage of shale gas development, and Asia, which has increased local production capacity and consumption,” SABIC said in a statement.

The company, which reported a net profit of approximately US$6.59 billion in 2012 and has 40,000 employees spread across 40 countries, did not identify which European businesses would close.