Tata Steel plans to cut 1,000 jobs in Wales

Wednesday 04th December 2019 05:32 EST

Tata Steel plans to reduce the workforce by around 1,000 in Wales as part of its restructuring plans. The company said that two thirds of the job losses will be management and office-based roles. In the Netherlands 1,600 positions are also set to go, with 350 others cut elsewhere in the world. Tata Steel's Europe CEO, Henrik Adam, said the company "cannot afford to stand still" as "the world around us is changing fast and we have to adapt". Speaking in north Wales, Skates said it would probably take until February 2020 for all the details to emerge but it "appears to be the case" 1,000 jobs could be cut from the Welsh workforce. "This will understandably be a worrying time for Tata Steel employees and their families in Wales," he said.

"Tata Steel has previously confirmed that they intend to seek to avoid compulsory redundancies and I will be impressing on the company the importance of standing by this commitment." Roy Rickhuss, general secretary of the Community union which represents workers in the steel industry, said Tata's proposals had "no credibility" and had been poorly timed. "I think the way the company have handled this has been atrocious, it's never a good time but having this announcement hit us a few weeks before Christmas is absolutely scandalous. "There was no need for this announcement at all at this stage." He told on a radio that plans had "no credibility" for the unions and Tata had been told to "go away, think again, and come back with a clear strategy, come back with a strategy for the future".

"We want to know about investment, what the future holds and all they've done is come up with this awful proposal just to cut jobs." Tata has one steelmaking site and five other facilities in Wales. Port Talbot employs 4,000 workers - nearly half of Tata's UK workforce - but the firm is yet to specify which UK locations will suffer the cuts. Rickhuss said he understood most of the jobs at risk would be "white collar and managerial jobs". The firm first announced plans to cut 3,000 jobs across its European business last week, in a bid to come to terms with a "severe" international steel market.

In a bid to improve financial performance, the company also expects to increase its sales of higher-value steels, optimise production processes and reduce its procurement costs. Community said the job cuts were "a consequence of management failure to have a Plan B following the collapsed of the joint venture with Thyssenkrupp".

Industry analyst Dr Kath Ringwald said the news was "not unexpected", adding "With current market conditions, it was going to be difficult for Tata to sustain production at current levels. They are taking measures to reduce their cost base in the hope of longer-term survival." She said Tata had to do "something radical" because worldwide demand had "flatlined". “It does not signal the end of steelmaking in the UK," she said. "But to continue making it at the current rate may be optimistic." Ringwald added energy prices and business rates were higher in the UK than other steel-producing countries such as France and China, and the next government would face pressure to offer help.

Tata's UK plants were put up for sale in March 2016, leading to months of uncertainty. However, the move was put on hold and a 10-year £1bn investment plan was announced for the UK's biggest steelworks at Port Talbot - if market conditions allowed - along with a commitment to try to avoid compulsory job losses.

Tata explored merger options with Thyssenkrupp over the next two years and a deal was finally agreed in the summer of 2018. But competition concerns emerged over creating what would be Europe's second biggest steelmaker and the deal fell through. The European Commission, which blocked the merger, said the companies "did not offer adequate remedies" to pricing and competition concerns.

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