(Bloomberg) -- BASF SE plans to cut 6,000 jobs worldwide in the face of a slowdown in demand for chemicals, unveiling the headcount reduction on the same day as Ford Motor Co. said it would eliminate a fifth of its workforce in Europe.
BASF's trimming of about 5% of the payroll -- half at home in Germany -- will generate savings of 300 million euros ($341 million), the Ludwigshafen-based company said in a statement on Thursday. The shares gained 1.6% in Frankfurt.
The overhaul at BASF came on the heels of Ford's announcement of job cuts aimed at tackling falling sales in the region and weak profitability. The moves underscore a drop in June of Euro-area economic confidence to its lowest level since 2016 as deepening trade tensions and a more cautious outlook for the global economy weigh on business and consumer sentiment.
BASF's decision also comes at a time when demand for chemicals is falling at a range of industries from cars to electronics. Earnings at chemical producers including HB Fuller Co. and LyondellBasell Industries NV have already revealed weaknesses in sectors like coatings and plastics.
The BASF job cuts are part of Chief Executive Officer Martin Brudermueller's plan to boost earnings by 2 billion euros through a simplification of the world's biggest chemicals company. He also plans to sell more higher-margin products rather than simply delivering barrels of basic chemicals.
Changing Culture
In addition to the cuts, BASF also plans to make 29,000 jobs more flexible through the deployment of engineers, digital experts and other employees to different sites or business units when needed. The modification represents a sweeping change to BASF's work culture, where personnel have traditionally been assigned to specific units.
Talks on a labor deal at BASF's flagship chemical complex in Ludwigshafen will get underway earlier than planned, the company said. German engineering giant Siemens AG is also eliminating jobs in the country at its power division, having undertaken months of negotiations with labor unions to hammer out a deal.
| Read more: Ford to Cut 20% of European Workforce in Sweeping Overhaul Siemens to Cut 2,700 Jobs at Energy Unit Due for Listing (1) |
To contact the reporter on this story: Andrew Noël in London at anoel@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel, Elisabeth Behrmann
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