Evonik cutting 2,000 jobs as part of restructuring program

As part of its restructuring plan, German chemical company Evonik AG says it will  cut up to 2,000 jobs worldwide, with around 1,500 job cuts to be made in Germany.

A “disproportional” number of management positions will be cut, the German chemical company said in a March 4 investor relations statement.  The number of hierarchical levels below the executive board will be reduced to a maximum of six. Groupwide managers will start leading a median of seven direct reports, compared to the current span of one to four.

The moves are part of a company restructuring plan called “Evonik Tailor Made,” which is designed to establish a new organizational structure that eliminates administrative activities that do not “directly support its businesses” by the end of 2026.

“What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment,” said Evonik chairman Christian Kullmann. “We are addressing this challenge with the ‘Evonik Tailor Made’ program which will change our organizational structure for good.”

Evonik expects cost reductions of around 400 million euros (US$436 million) annually after the program’s completion in 2026. Around 80 per cent of these savings will be personnel reductions, the rest will come from lower non-personnel costs. The first effects of “Evonik Tailor Made” should materialize in the current year already, the statement said.

“We have chosen our own, tailor-made path for Evonik without external consultants to achieve the best possible results,” said Thomas Wessel, Evonik’s chief human resources officer and labour director. “It is clear that our company will look very different in two years ─ much more dynamic and efficient.”

In the coming weeks, the statement said, Evonik’s executive board and the co-determination bodies will negotiate how the planned job cuts “will be carried out in a socially responsible manner.”