Evonik plans to slash 2,000 jobs after posting a net loss in 2023

Evonik plans to slash 2,000 jobs after posting a net loss in 2023

Evonik Industries, the German specialty chemicals company, announced on Monday that it would reduce its workforce by up to 2,000, or around 6%, by 2026 as part of a cost-cutting and restructuring program. The company said it expects to save around €400 million annually by the end of 2026, with most of the job cuts affecting its German operations.

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The announcement came after Evonik reported a net loss of €465 million for 2023, compared with a net income of €540 million in 2022. The company attributed the loss to exceptional impairments and charges related to structural measures, which amounted to €1.1 billion in 2023. The company’s sales also declined by 17% to €15.3 billion, while its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 24% to €1.66 billion.

Evonik said it does not anticipate an economic recovery in 2024 and will limit its capital expenditures to around €750 million. The company also forecast an increase in its adjusted EBITDA to a range of €1.7 billion to €2.0 billion, with sales of €15 billion to €17 billion.

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Evonik’s CEO Christian Kullmann said that the company is facing “massive, consequential changes” in its economic environment and needs to “continue its fundamental revamp”. He added that the company will focus on its core businesses of specialty additives, nutrition and care, smart materials and performance materials, while divesting or closing non-core activities.

PHOTO: ALEX DOMANSKI/REUTERS

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Source : The Wall Street Journal

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