August 31, 2017 / 2:19 PM / 3 months ago

Thyssenkrupp to cut up to 1,500 jobs at Industrial Solutions

FRANKFURT (Reuters) - Thyssenkrupp will cut up to 1,500 additional jobs at its Industrial Solutions unit, most of them in Germany, to boost the struggling division’s competitive edge, it said on Thursday.

FILE PHOTO: The logo of German steel-to-elevators group ThyssenKrupp AG is pictured during the company's annual news conference in Essen, Germany, November 24, 2016. REUTERS/Wolfgang Rattay/File Photo

The job cuts at the unit, to be made over the next three years, come in addition to 500 reductions that were already announced previously, Thyssenkrupp said.

Overall, Industrial Solutions, which engineers plants and builds ships, employs more than 21,000. The cuts will improve earnings before interest and tax at the unit by up to 200 million euros ($237 million) a year over the next three years, the group said.

“There are many opportunities, but the competitive pressure is enormous,” Peter Feldhaus, the unit’s chief executive, said in a statement. “Although new orders have recovered from their trough, our structures are still oversized measured against orders in hand and our medium-term requirements.”

In addition to low oil prices that have discouraged investments in new plants, the unit is also suffering from low-margin legacy orders and poor demand for chemical plants.

In the third quarter, operating profit at Industrial Solutions, labeled as Thyssenkrupp’s “problem child” by Jefferies analysts, fell sharply to 6 million euros, below the 18 million average in a Reuters poll.

($1 = 0.8427 euros)

Reporting by Christoph Steitz; Editing by Maria Sheahan and Georgina Prodhan

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