Tata Steel Nederland's union seeks more clarity on restructuring plan

Tata Steel shares rise 5% as JPMorgan sees 500 mn euro savings amid transformation of Netherlands ops.

A key labour union representing white-collar employees at Tata Steel Nederland has raised concerns over the steelmaker’s recently announced transformation plan, urging the company to provide greater clarity on the viability of its proposed reorganisation.

Last week, Tata Steel unveiled plans 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 in response to changing market dynamics and stricter EU emission norms. The restructuring is expected to contribute an estimated EUR 180 million toward Tata Steel’s targeted cost savings of EUR 500 million by FY26.

However, De Unie, a prominent Dutch union, has questioned whether the company can maintain operational effectiveness under the new structure.

“The main question, of course, is whether you can still lead your organisation effectively with 1,600 fewer people. What makes this new structure workable? These are the questions Tata Steel still needs to answer,” said Hans Korver, negotiator with De Unie, in an interview with Moneycontrol.

In a letter dated April 14 seen by Moneycontrol, the union urged Tata Steel to adopt a hiring freeze—except in critical production roles—and to prioritise internal redeployment to manage existing vacancies.

Korver also pointed to ongoing discussions around securing government aid for Tata Steel Nederland’s transition to green steel. “It’s based on a report published last year that outlined seven scenarios — the most promising of which was the Green Steel plan. It was a strong plan and held political significance for various parties. But politics isn’t the only factor at play — there are also the banks and, of course, Tata Steel India, the parent company,” he noted.

According to Korver, financial institutions backing the transition will expect a detailed and viable organisational roadmap. “Banks will demand a proper plan for a better organisation. So that keeps pressure on the 1,600  jobs, but also keeps pressure on ensuring it’s a good, solid plan,” he said.

Tata Steel is expected to receive a larger support package from the Dutch government compared to the UK, CEO & MD, TV Narendran, had told Moneycontrol last year. The company’s decarbonisation strategy involves phasing out blast furnaces in favour of electric arc furnaces (EAFs), aligning with the EU’s 2030 emissions framework.

The 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.

To address this, the company has initiated consultations with the Central Works Council by filing a formal Request for Advice—a prerequisite for any major organisational change under Dutch law.

“Tata Steel has announced that they want to negotiate a social plan, and we’re not opposed to discussing that. But the timing is still uncertain,” Korver said. “First, we need to be convinced that the reorganisation plan they’ve put on the table is viable. Only once we understand the full scope — including how many people will be affected and at what levels — can we begin meaningful discussions.”

The Works Council holds legal authority in the Netherlands to advise on key decisions such as restructuring and layoffs. Korver noted that the union plans to strengthen its coordination with the council as the process unfolds.

“If an employer doesn't have a solid plan, the process with the Works Council can take months,” he added.