ArcelorMittal SA to begin ‘large-scale’ restructuring as pandemic dampens steel demand
Hit by the impact of Covid-19 which has caused demand for steel to plummet, ArcelorMittal South Africa says it will embark on a “large-scale restructuring” which will affect an unknown number of jobs.
ArcelorMittal South Africa is part of global steel manufacturer and mining group ArcelorMittal, which has about 190 000 employees worldwide.
The producer is the latest local company to announce restructuring plans as operations take strain from the economic shock caused by the coronavirus pandemic. Sasol has also announced that it would begin talks to cut jobs as part of its cost saving strategy.
ArcelorMittal SA in January already announced 1 000 job cuts in a bid to rein in costs, but on Thursday said in a statement that “cost-saving initiatives previously implemented will not be sufficient”.
“A large-scale restructuring is contemplated, and the number of jobs impacted will depend on the alternatives identified and agreed to mitigate the impact,” it said.
It anticipates that it will take some time for crude steel production levels to return to historical levels or planned levels of 2020.
The company, which is Africa’s largest steel producer, had last month stated that it would return to full production if demand pick ups.
In February, ArcelorMittal received a green light from the Competition Tribunal to acquire the steel and rail manufacturing business of Highveld Structural Mill in a deal worth R300 million.