Evonik said March 4 it will cut 2,000 jobs worldwide as the company looks to save 400 million euros ($434 million) amid declining sales volumes and prices.
Most of the positions cut will be in management, and approximately 1,500 of the job reductions will impact the specialty chemical manufacturer’s Germany operations.
Evonik announced the move after reporting sales fell 17% in 2023 to 15.3 billion euros ($16.6 billion). The company reported a net loss of 465 million euros in 2023 due to “exceptionally impairments and burdens from structural measures.” In the previous year, Evonik reported a net income of 540 million euros.
The company's adjusted earnings before interest, taxes, depreciation, and amortization were 1.66 billion euros, within the forecasted range of 1.6 billion and 1.8 billion euros.
Sales volumes fell by 8% in 2023, and selling prices declined by 3%.
Evonik does not expect an economic recovery in 2024. In response, the company said it will limit capital expenditures this year.
"We must not delude ourselves, even if there are slight signs of a recovery,” says Christian Kullmann, executive board chairman. “What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment.”
The company plans to continue addressing these challenges through a plan that will result in a new organizational structure by 2026. The program, called Evonik Tailor Made, includes plans to eliminate administrative activities that don’t “directly support its businesses” and to reduce management layers below the executive board to a maximum of six.
The company said it expects the measures will significantly accelerate approval procedures.