BASF to cut 2,600 jobs, shutter TDI plant
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The chemical giant's cost-savings program is largely a response to the high costs of energy and raw materials exacerbated by the war in Ukraine.
Chemicals giant BASF SE plans to cut 2,600 jobs and reduce production in Germany, in a cost-savings program responding to the high costs of energy and raw materials, largely exacerbated by the war in Ukraine.
The company is closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site in Germany.
Overall, the cuts will reduce BASF’s workforce by about two per cent through 2024. “High energy prices are now putting an additional burden on profitability and competitiveness in Europe,” BASF CEO Martin Brudermüller said in a statement, which also cited “overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors.”
When completed, the cost-saving program is expected to generate annual cost savings of more than 500 euros million in non-production areas. Roughly half of the cost savings will come at the expense of the Ludwigshafen site, BASF said, where the company will shutter its TDI plant and precursor plants for DNT and TDA.
BASF also forecast lower operating profit this year, with adjusted earnings before interest and taxes of as much as 5.4 billion euros, after earnings declined 12 per cent in 2022 to 6.9 billion euros.
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