Job losses confirmed at steel business which employs 500 Sheffield workers

Finnish steel company Outokumpu which is based on Europa Link in Tinsley, has verified that Sheffield staff will face 70 job losses as the business initiates a ‘turnaround’ program to develop its Long Products business – which produces steel rods and bars – internally.

The steel plant which employs around 500 workers in the city, concluded a review into the Long Products which has been ongoing since February and created ‘uncertainty’ around job security among staff.

In an internal update which was sent to employees, Outokumpu sighted the “commercial expansion” required to develop the products internally and a “need to return to cost competitiveness” as the reason for the UK redundancies.

The letter read: “The turnaround program will start immediately.

“It requires a commercial expansion, but to do this, there is a need to return to cost competitiveness, reversing a trend of higher unit costs in the past two years.

“Consequently, negotiations surrounding a proposal to reduce costs, including approximately 100 positions by year end will begin immediately.

“Approximately 70% of the planned redundancies will take place in the UK as shift reductions have already been implemented in Sweden during the second quarter this year.

“Further details such as impacts on different employee groups will be determined as part of the employee negotiations process.

“Results of the employee negotiations and possible impacts will be communicated in due course.

“Other turnaround actions include the implementation of Outokumpu’s manufacturing excellence methodology at the Long Products’ sites to increase operational efficiency.

"The actions also include commercial measures such as expanding the current product mix and focus on higher value specialty grades, as well as reversing general market share decline.

"The progress of the turnaround program will be closely monitored by a designated steering group to ensure successful implementation.”

The Sheffield-based Long Products operations have the capacity to produce more than 200,000 tonnes of steel annually, such as wire-rods for the oil, engineering and chemical industries.

The Tinsley site, which was formerly owned by British Steel Stainless, Avesta Sheffield and Polarit, includes meltshop SMACC (Stainless Melting and Continuous Casting), a wire rod mill and a bar finishing facility and the firm also runs a sales and distribution company in Sheffield.

President of Long Products Liam Bates told employees: “First and foremost, after a thorough review, I am confident that with the current footprint, we can return to profitability.

"The announced measures are critical in order to restore Long Products’ competitiveness and to improve our financial performance.

"The planned personnel reductions will have an emphasis on ensuring that we can compete at the current lower demand levels and are as such targeting overhead as well as direct labour.

"In addition to the immediate measures, we are at the same time starting initiatives that will also have an impact on both our ability to sell and our cost competitiveness in 2021.”

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