Evonik to slash 2,000 jobs in cost-cutting overhaul

GERMAN chemical company Evonik plans to cut 2,000 jobs worldwide after it reported a net loss of €465m in 2023 and a drop in sales in all its divisions.

The company expects to cut 1,500 in Germany alone in the next two years, with managerial positions being hit hardest.

The cuts are part of Evonik’s reorganisation programme, “Evonik Tailor Made”, which aims to save the company €400m (US$437m).

Evonik’s latest financial report recorded adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of €1.6bn in 2023, with overall sales sat at €15.3bn, a 17% decrease from 2022.

With no expectation of economic recovery, the company predicts 2024 improvements to be marginal, forecasting an EBITDA of €1.7bn and sales staying around €15bn to €17bn.

Christian Kullman, chairman of the executive board, said: “What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment.”

Evonik’s performance materials division was the worst-performing across its specialty divisions – which include nutrition and care, and additives – with a sales decrease of 22% in 2023, compared to 2022.

The fall was due to a decline in demand and the lower cost of C4 chemicals, which includes chemicals used for rubber and plastic, and the decrease in sales of superabsorbents.

Evonik’s move is the latest in a line of cost-cutting measures from European chemical companies after poor industry performance in 2023. The European Chemical Industry Council’s January chemical trends report found that EU27 global exports fell last year by €16bn compared to 2022.

The report blamed the decline in production and trade on energy price rises and a decline in global demand for chemicals worldwide.