BY Fraser Tennant
In a streamlining process designed to ensure its long-term growth, British Steel is to cut 400 jobs at its sites in the UK, Ireland, France and the Netherlands – approximately 10 percent of its 5000-strong workforce.
The cuts will be made in managerial, professional and administrative roles, despite first quarter profits being a reported £21m.
The company has stated that the cuts are part of the company’s ongoing transformation – which has already seen it commit £170m toward improving its manufacturing operations during its first three years. British Steel was saved from collapse two years ago when investment firm Greybull bought the business for £1 from Tata Steel.
British Steel is also taking further steps to secure a sustainable future, including continuing to improve manufacturing performance and increasing turnover through strong sales.
“We have made a strong start to life as British Steel but our external environment is constantly changing,” said Gerald Reichmann, British Steel’s chief financial officer. “It is unfortunate we need to go through the proposed redundancy process but by focusing on profitable, niche products I am confident we will create a long-term future for our business and the communities in which we operate.”
British Steel has made it clear that no site closures are being considered as part of the streamlining process. The company has also said that it remains committed to making significant investments in its core products – rail, wire rod, construction and special profiles – along with its iron and steel-making operations.
“It is important our business continues to evolve,” said Roland Junck, British Steel’s executive chairman. “We have already committed £120m to capital expenditure projects and are pressing ahead with the £50m upgrade to our Scunthorpe Rod Mill. However, the pace of change we need in this challenging industry requires further and continued investment along with more agile and efficient operations. To help us achieve this, we have to make difficult decisions.”
Mr Reichmann concluded: “Strong market conditions support the approach we are taking – we have a robust order book and continue to secure significant contracts with customers, old and new, around the world.”