The chemical group Evonik plans to put off as much as 20% of its 32,000 employees within the largest reorganization in its historical past | Economy | EUROtoday

Evonik, the massive European specialty chemical compounds group, is dealing with the most important restructuring in its historical past, which can have an effect on as much as 7,000 workers all over the world, who may lose their jobs or develop into a part of one other firm by the sale of considered one of its divisions. In addition, 1,000 of the 4,500 administration positions can be eradicated.

The group, based mostly in Essen, in western Germany, had already launched a cutback program that foresees the elimination of two,000 jobs, of which 1,500 are in Germany. However, the corporate introduced this Friday that it’s contemplating promoting some enterprise items or, not less than, it’s exploring the opportunity of separating them or transferring them to joint or exterior firms. In complete, 7,000 of the present 32,000 jobs may very well be eradicated.

These plans come at a time of great disaster within the chemical business in Germany, which has to face a profound restructuring of its power provide resulting from rising prices. It additionally impacts the weak spot of the German financial system, which has precipitated many industrial firms to cut back their manufacturing, which has an impression on the demand for chemical merchandise.

Evonik administration famous that gradual cuts have been made to its portfolio in recent times “in the interest of growth and resilience” and now the time has come to take the following step and concentrate on an total reorganization. “In recent years we have significantly improved the quality of our portfolio,” stated Chairman of the Board of Directors Christian Kullmann.

In 2023, the group recorded a 17% drop in its enterprise quantity, which stood at €15.3 billion, and obtained earnings of €1.66 billion, in comparison with €2.5 billion the earlier 12 months.

“In our current structure, the chemical specialty criterion alone is no longer sufficient for our future development. The term has been completely blurred in terms of content and no longer differentiates us enough for our clients and in the capital markets. In the future, we will manage Evonik in a more differentiated way,” stated Kullmann.

From 4 to 2 divisions

Until now, Evonik, which is current in additional than 100 nations, offered its leads to 4 divisions. The firm’s plan is that as of April 1, 2025 there can be two pillars, into which the earlier 4 segments will merge.

On the one hand, there can be companies oriented in the direction of options and innovation underneath the identify Custom Solutions, the place specialised chemical merchandise can be provided for area of interest markets. In this division you may apply excessive costs and acquire good margins. About 7,000 workers belong to this section, which incorporates components for paints or coatings and merchandise for the cosmetics and pharmaceutical industries.

And, however, there would be the pillar of companies oriented in the direction of know-how and effectivity, underneath the identify of Advanced Technologies. This division will mix merchandise of which the group is among the largest suppliers on the planet, akin to amino acids for feed or the hydrogen peroxide enterprise. Some 8,000 workers will belong to this section sooner or later.

“Our new management model takes this positioning into account,” stated Kullmann. The companies that can be included within the two new segments, Custom Solutions and Advanced Technologies, at the moment have annual gross sales of round 6,000 million euros every.

The reorganization additionally impacts the board of administrators and administration. The American Lauren Kjeldsen and the French Claudine Mollenkopf will assume the 2 new enterprise strains on the board of administrators. Former BASF government and Evonik government board member Harald Schwager and Johann-Caspar Gammelin will depart the corporate.