LUDWIGSHAFEN (Realist English). German petrochemical concern BASF will cut 2,600 jobs and stop repurchasing its shares amid further revenue declines and high costs in Europe. This is reported by the American TV channel CNBC.
“Europe’s competitiveness is increasingly suffering from overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors,” said Chief Executive Martin Brudermueller.
The German chemicals giant said in a statement on Friday that 2023 earnings before interest and tax (EBIT), adjusted for special items, would fall to between 4.8 billion euros ($5.09 billion) and 5.4 billion from 6.9 billion in 2022, which was down 11.5% from 2021.
Job cuts would primarily affect administrative and research positions but several production lines would also be shuttered at its Ludwigshafen headquarters, home to its largest chemical complex with about 39,000 staff, with workers mainly transferred internally. This includes the closure of one of two ammonia plants in Ludwigshafen. Ammonia, among the most gas intensive products in the chemical industry, is used in products such as engineering plastics and diesel exhaust cleaning fluid but BASF said customers’ demand would still be met.
BASF, which in October laid out plans to cut annual costs in Europe by 500 million euros, said on Friday that this would translate into about 2,600 job cuts, about 65% of which would be in Germany and laid out plans to cut another 200 million euros in annual costs.
European natural gas prices soared last year after Moscow’s invasion of Ukraine. Although European prices have eased to around 50 euros per megawatt hour (MWh) from last August’s peak of more than 340 euros, they remain above historic averages.