ThyssenKrupp Cuts 11000 Steel Jobs

Germany's industrial icon is crumbling. ThyssenKrupp Steel Europe reached an agreement Monday with the IG Metall union to eliminate or outsource 11,000 jobs—a staggering 40 percent of its workforce—as the country's largest steelmaker confronts brutal economic realities that have been decades in the making.

The restructuring agreement, which takes effect immediately and runs through September 30, 2030, will slash production capacity from 11.5 million tons annually to a shipping level of 8.7 to 9 million tons. The cuts represent the latest and perhaps most dramatic chapter in the decline of what was once a symbol of German manufacturing might.

"Through our joint efforts, we have succeeded in sweeping away the last obstacles on the way to signing the agreement, and we have achieved a viable result," said Ilse Henne, Chairwoman of the Supervisory Board of ThyssenKrupp Steel. But the admission that follows reveals the scale of the pain: "There will be a lot of lay-offs and we will be making some swinging cuts."

Asian Competition Crushes European Steel

The agreement is based on an industrial concept presented in November 2024, which IG Metall initially said would be met with "fierce resistance." That resistance apparently melted away as the economic case became undeniable.

For four of the last five years, ThyssenKrupp's steel division has suffered operating losses amid a perfect storm of challenges: fierce competition from Asian producers, high electricity prices, and weakness in German industry. The company has twice reduced the book value of its steel division in recent years—by €2.1 billion in fiscal 2022-2023 and another €1 billion in fiscal 2023-2024.

"Overcapacity and the resulting increase in cheap imports, particularly from Asia, are placing a significant strain on competitiveness," the company stated. Rising production costs and increased import pressures from Asian countries have fundamentally undermined the competitiveness of European steel.

The numbers tell a grim story. In fiscal 2023-2024, ThyssenKrupp Steel Europe's order intake fell 14 percent year-over-year. Steel product shipments dropped 5 percent to 9 million tons. One of the primary culprits was declining demand from the automotive sector, which is itself experiencing a crisis as it struggles with the transition to electric vehicles and competition from Chinese manufacturers.

The restructuring will result in approximately 5,000 direct job cuts by 2030 through adjustments to production and administration. Another 6,000 roles will either transfer to external service providers through outsourcing agreements or disappear through direct sales of business activities.

The End of a 200-Year Legacy

ThyssenKrupp traces its roots back to 1811 when Friedrich Krupp founded his steel company. The Thyssen side began in 1891 when August Thyssen acquired shares of a coal mining company and opened steelworks in Hamborn (now part of Duisburg). The 1999 merger of these two German steel giants created what was supposed to be an unshakeable industrial powerhouse.

Instead, the company has become a case study in how even centuries-old industrial leaders can be undone by global competition and shifting economic conditions. The conglomerate, which has almost 100,000 employees worldwide, now faces potential dismantlement as it attempts to transform into several standalone businesses.

The company's struggles mirror broader problems in European manufacturing. According to the Organisation for Economic Co-operation and Development (OECD), nominal crude steelmaking capacity in Europe exceeds 200 million tons, but actual output has lagged far behind in recent years. In 2023, steel output fell to 126.3 million tons, down from 136.3 million tons in 2022 and 152.6 million tons in 2021.

"Steelmaking capacity massively outweighs actual production in Europe and is representative of what needs to be done—shutting down redundant capacity," a trading source told Fastmarkets. "EU steelmaking capacity will be reduced—it's as simple as that."

Green Transition Adds Cost Pressures

Despite the brutal cuts, ThyssenKrupp maintains it remains committed to carbon-neutral steel production. Construction of a direct reduction plant at the Duisburg location continues as part of the company's €3 billion green steel investment.

By 2030, two of Duisburg's four blast furnaces will be replaced by the direct reduction plant and two planned innovative smelters with a total shipping capacity of 2.2 million tons per year. Another blast furnace is expected to be replaced with a modern electric-arc furnace after that.

But the economics of green steel production remain uncertain. German laws require steel production to produce "almost zero" emissions by 2045 as part of the country's goal to make the entire economy greenhouse-gas neutral. The transition from traditional blast furnaces to hydrogen-based production methods adds significant costs at precisely the moment when European steelmakers can least afford them.

The company acknowledged earlier that it cannot guarantee its green steel site investment will be economical, a stunning admission for what represents the single biggest investment in the company's modern history.

Germany's Industrial Crisis Deepens

ThyssenKrupp's troubles reflect broader challenges facing German industry. The country's economy, Europe's largest, has been struggling with the loss of affordable Russian gas, historic Volkswagen plant closures, and fierce competition from cheaper Chinese electric vehicles.

After contracting slightly for two years in a row, economic activity in Germany is expected to broadly stagnate in 2025, according to European Commission forecasts. The government's deficit is set to remain elevated, and the government debt ratio is expected to increase to 64.7 percent of gross domestic product.

Politicians voiced anger at the potential impact. Dennis Radtke, a European Parliament lawmaker, warned of a "dramatic situation for the entire value chain in the steel industry" and called for swift action to "avoid carnage that would make us even more dependent on China."

For the 27,000 workers at ThyssenKrupp Steel Europe, the restructuring agreement represents an existential threat to their livelihoods. The remaining 16,000 employees after cuts face wage reductions of 10 percent to bring personnel costs "to a competitive level." This will be achieved through cutting special payments and bonuses, with newly hired employees receiving lower wages.

The agreement's financing has been secured through September 2030, though parties have agreed to keep the terms confidential. What is clear is that one of Germany's most storied industrial companies is fighting for survival, and thousands of workers will pay the price.

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