Swedish specialty steelmaker SSAB said it would slash costs by SEK 800 million and cut 200 jobs after a drop in demand due to Europe's debt crisis slammed quarterly earnings.

SSAB said its cost cuts would include a reduction of about 10% in white collar staff in Sweden, or some 200 jobs. The group employs about 6,000 staff in the country.

SSAB said it had renegotiated its iron ore agreements for deliveries during the first quarter because of lower prices, a factor which would help second quarter results.

Mr Martin Lindqvist CEO of SSAB told “Demand in Europe remains weak, with low price levels.”

He however said that “The situation appeares to be somewhat brighter in other parts of the world. There are clear signs that a recovery has begun in North America.”

He told a call with analysts that the firm would take an extra cost due to the new measures but declined to offer specific details about how much.

SSAB had warned in November it would have to scale back staff in Sweden as customers across Europe had turned increasingly cautious about orders. A downward trend in steel prices has also squeezed profits.

(Sourced from Reuters)