AFP reported that ArcelorMittal is preparing plans for thousands of job cuts in Europe due to the continuing economic turbulence in world's second richest continent.
The Luxembourg based steelmakers said that it is planning to optimize its support services at its European flat carbon steel division, which unions have said world lead to thousands job losses.
According to report from AFP news agency, at the company's European work's council meeting held this week in Luxembourg, ArcelorMittal's Flat Carbon Europe division gave a presentation on guiding objectives on future organisation in regards to support services, which includes administration, human resources, technology and purchasing.
ArcelorMittal said in a written statement to AFP that "To face economic difficulties in Europe, the Flat Carbon Europe division considers it vital to improve and insure competitively of its activity at all levels."
Mr Edouard Martin of the French CFDT union told the news agency that the entire exercise is a hidden layoff plan which will lead to thousands of job cuts in Europe.
The CFE CGC union of France envisages between 3,000 and 5,000 jobs could be cut from the 10,000 support jobs mainly in Belgium, France, Germany, Spain, Poland, and Romania.
Mr LN Mittal chairman & CEO of ArcelorMittal had last week told the Financial Times that the sustained collapse in European steel demand has created a severe imbalance with potential supply of the metal and that the overall problems for the world economy remained very concerning.
He also ruled out further site closures in Europe as the global steel industry currently has an overcapacity due to the slowdown in demand and consumption in China.
Brussels based World Steel Association had last month in its monthly report said that the European Union remained slow as production fell 5.5% to 15.3 million tonnes against 16.1 million tonnes in May 2011.
While Mr Mittal had earlier forecast global steel consumption to grow by 4% in 2012 and 2013, the World Steel Association earlier this year projected that steel consumption in Europe was expected to shrink by 1.2% in 2012 to 150.9 million tonnes due to the sovereign debt crisis.
ArcelorMittal produced 92,629,000 tonnes of steel in 2011 or 6% of the global steel output, 37% of it was produced in Western Europe, while 11% was in Central and Eastern Europe. The company has already temporarily shut several plants in Europe since 2011 and idled many more, citing structural over capacity in Northern Europe amid a difficult European market.
Source - AFP
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