Covestro to cut 900 jobs in cost savings move

In a dramatic bid to reduce expenses, German plastics and chemicals firm Covestro AG plans to cut 900 jobs globally and reduce costs by 350 million euros (Cdn $520 million) per year by 2021,

Of the 900 jobs that will be cut from Covestro’s global workforce of 15,700, 400 will be in Germany.

“We are seeing increasingly challenging economic conditions and also experienced limited product availability in Europe and Asia in the past quarter. Nonetheless, we were able to keep volumes stable,” Covestro’s finance chief Thomas Toepfer said in a statement. “[But] rapid earnings growth over the last two years, driven by supply shortages across the industry, has been levelling off.”

A former subsidiary of Bayer, Covestro is in the process of stepping up annual investment expenditures to reach as much as 1.2 billion euros over the next three years, up from 507 million in 2017.

“The main driver will be a new 1.5 billion euros plant in Texas to produce chemicals for rigid insulation foams, taking up a challenge posed by rivals’ growth plans,” Toepfer said.