BASF is the latest major chemical company to announce job cuts and production shutdowns to reduce costs amid high energy prices, particularly in Europe where the war in Ukraine continues to impact access to materials.
The company said on Feb. 24 it will cut 2,600 jobs across Europe and close several plants at its Ludwigshafen site in Germany.
“Europe’s competitiveness is increasingly suffering from overregulation, slow and bureaucratic permitting processes, and in particular, high costs for most production input factors,” said Martin Brudermüller, BASF board chairman and executive director. “All this has already hampered market growth in Europe in comparison with other regions. High energy prices are now putting an additional burden on profitability and competitiveness in Europe.”
The plant closures include an ammonia facility used for fertilizer manufacturing, plants related to adipic acid production, and the closing of a TDI plant and the precursor plants for DNT and TDA.
The job cuts are part of a previously announced cost restructuring plan to save more than 500 million euros ($530 million) by the end of 2024. The plant closures will reduce fixed costs by an additional 200 million euros annually by 2026, the company said. BASF reported a total workforce of 122,404 employees in 2018.
The company’s announcement comes a month after Dow Inc. said it would cut 2,000 jobs and shut down select assets to save $1 billion.
Dow, which has a global workforce of 35,700 people, said the cuts were necessary to optimize its cost structure due to macroeconomic uncertainty, including high energy prices.
