Steel major Tata Steel is hopeful of completing its restructuring at the Netherland plant by the end of second quarter of this fiscal as it seeks government's nod for the planned redundancies, Managing Director TV Narendran has told Moneycontrol.
In April, the steelmaker had unveiled a proposal to cut around 1,600 jobs across management and support functions as part of a broader strategy to reduce fixed costs, enhance production efficiency, and realign its product portfolio to align with stricter EU emission norms. The restructuring is expected to contribute an estimated EUR 180 million toward Tata Steel’s targetted cost savings of EUR 500 million by FY26.
Commenting on the transition, Chief Financial Officer Koushik Chatterjee said, "There needs to be actions to be done and we need to be fit for the future before we spend billions of Euro on the decarbonization project. There is a social plan, which is essentially a plan that conveys the negotiated redundancy package in simple terms. Then, there is a transition plan, that is, how many people will go over a period of time. I think, we were expecting to happen by the end of second quarter."
Earlier in July, the steelmaker submitted its transformation plan to the Netherland's Works Council, a body to protect and promote employees, for approval.
The local labour union De Unie, which represents white-collar employees at Tata Steel Nederland, flagged that the company may not get a green light even in September as the company has not provided a ‘mapping table’ showing how old roles align with new ones.
"I don't know how long this process will still take because if Tata Steel doesn't have that table earlier than the beginning of September, I expect that request from the works council in November or December," said Hans Korver, negotiator with De Unie.
According to Korver, Tata Steel's plan submitted to the council officially mentions nearly 1,224 roles to be terminated instead of 1,600 roles.
"The actual impact is bigger. Around 2,000+ employees will lose their current roles, and while some will be offered new roles, many will have to reapply .. not all will succeed. Over 3,000 employees are in a state of uncertainty, some roles are being entirely eliminated, others are being downsized," he said.
However, Tata Steel said that the original 1,600 number includes not just layoffs but also vacancies that won’t be filled.
"There are vacancies which are not being filled up, etc. So, when you look at 1600, it includes all that," Managing Director TV Narendran had told Moneycontrol on July 31.
"There are 2400 jobs for 3200 people. There is a consultation process with the union as well. So, the union obviously will have their views on what should be done and not be done, but that's a conversation that happens between the management and the union," Narendran added.
Tata Steel's restructuring announcement comes amid weak demand across European markets, geopolitical instability, and elevated energy costs that continue to weigh on the steelmaker’s bottom line. While Tata Steel Nederland has recovered production to near-full capacity at 6.75 million tonnes in FY25, cost pressures remain a significant challenge.
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