Tata Steel Europe plans to sack 500 people associated with its long products business as part of restructuring proposals to strengthen its competitiveness.
The proposed changes affect predominately management and administrative functions at sites in Scunthorpe, Teesside and Workington, said the company in a press release on Tuesday.
About 340 positions may be affected in Scunthorpe, 90 in Workington and 40 in Teesside, it added.
The proposals come amid a prolonged downturn in demand for some of the key products made by the Scunthorpe-based business, including the UK market for construction steel, which is about half of 2007 levels.
Karl Koehler, CEO of Tata Steel’s European operations, said: “We will of course engage fully with employees, trade unions and our political stakeholders during this restructuring process. We will do everything we can to support our employees through this unsettling time.”
European steel demand this year is expected to be only two-thirds of pre-crisis levels after declines in the past two years. On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry, he said.
Steelmakers are shuttering plants and cutting jobs because of excess capacity in Western Europe. ArcelorMittal, the biggest producer, has closed sites at Liege in Belgium and Florange in France and says it is considering halting plants in Eastern Europe as it battles falling demand.
Tata, which bought Corus Group in 2007 for about £6.2 billion ($10 billion), has been shuttering sites and cutting jobs in the UK since the global financial crisis.