About two-third of the employees to be reduced would be office-based white collar staff, said the statement, which proposed new way of working to boost productivity and reduce bureaucracy.
"We plan to change how we work together to enable better cooperation and faster decision-making. This will help us become self-sustaining and cash positive in the face of unprecedented severe market conditions, enabling us to lead the way towards a carbon-neutral future," said Henrik Adam, CEO of Tata Steel in Europe.
Stagnant European Union steel demand and global overcapacity have been compounded by trade conflicts which have turned the European market into a dumping ground for the world's excess steel capacity. Together with a significant increase in the cost of emission allowances, this has created an urgent need for improvements to the company's financial performance, the statement said.
In the first six months of its current financial year starting April 2019, Tata Steel's European operations reported a drop of 90 percent in Earnings before Interest Tax Depreciation and Amortization (EBITDA) to 40 million U.S. dollars on a revenue to 4.2 billion U.S. dollars.
It may be recalled that world's second diversified steel producer, Tata Steel with annual revenue of 22.3 billion U.S. dollars, whose presence in Europe was expanded in April 2007 through acquisition of Corus, was exploring to merge its European operations earlier this year with German steel giant ThyssenKrupp to create a 50-50 pan European joint venture company.
The company would possibly announce plans to revamp its operations, which could have formed the continent's second-largest steel company after Lakshmi Mittal's ArcelorMittal, according to industry experts.
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