A huge loss of 16.4 billion! Germanys century old industrial giants are unable to sustain the layoffs of tens of thousands of people

category:Finance
 A huge loss of 16.4 billion! Germanys century old industrial giants are unable to sustain the layoffs of tens of thousands of people


However, due to the sluggish economic growth in Europe in recent years and the impact of the new crown epidemic, the Pearl of German heavy industry has also fallen into the plight of layoffs.

Three layoffs announced in two years

According to caixin.com, on November 19, Martina Merz, chief executive of ThyssenKrupp, announced that the company would lay off another 5000 employees, nearly doubling the number of layoffs originally planned. In 2019, ThyssenKrupp has announced 6000 job cuts. At present, the number of confirmed layoffs has risen to 11000, accounting for about 10% of the companys total.

In a conference call, ThyssenKrupps chief financial officer, Klaus keysberg, said the company had cut 3600 jobs and the remaining 7400 (about 7% of the companys total) would be laid off within the next three years.

Prior to this, Martina Merz announced in October 2019 that ThyssenKrupp would cut its employees by a large margin, with the number of layoffs reaching 6000.

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Sadly, the 2019 layoff plan has not been completed, and a outbreak has hit, and ThyssenKrupp decided to cut jobs again.

On March 25, ThyssenKrupp announced that it had reached an agreement with the German metal industry association (Ig metall) that as part of the agreement, ThyssenKrupp would lay off 3000 jobs in its steel sector by 2026. The company said it would cut staff in a socially responsible manner and that it would not make mandatory cuts until March 31, 2026. According to the layoff plan, the first step is to lay off up to 2000 people in the next three years; the second step is that the company will continue to lay off about 1000 people before 2026.

ThyssenKrupp said it would adjust production in its steel business as a result of the outbreak. Oliver Burkhard, executive director of the company, said: in the next few weeks, we will have to reduce working hours in multiple production locations. This will have an impact on production related areas, but also on the administration. We are studying all the measures carefully to determine which ones will work. Even if we dont have a production task to do, we will try to keep everyones jobs, so that we can get back on track after the crisis.

On the evening of August 13, ThyssenKrupp announced the first three quarters of fiscal year 2019 / 2020.

According to the financial report, ThyssenKrupps net profit loss in the third quarter alone reached 679 million euro (about RMB 5.6 billion yuan), and the net loss in the first three quarters (October 1, 2019 to June 30, 2020) was nearly 2 billion euro (about 16.4 billion yuan), nearly 10 times larger than the loss in the same period last year.

The companys revenue in the first three quarters was 27.5 billion euros, down 12% from the same period last year. In other words, the companys revenue in the first three quarters was only about 70% of the same period last year.

In terms of business segment, in addition to the elevator business, ThyssenKrupps only industrial design department is profitable, and other business departments are in a state of loss. Among them, the European steel sector suffered the largest loss, with a loss of 700 million euro (about 5.7 billion yuan).

On August 10, this year, ThyssenKrupp ranked 248 in fortunes latest Fortune 500 list with revenue of US $47.3 billion (about 40 billion euro), three places lower than the previous years ranking.

At the end of February, in order to save the companys declining performance, ThyssenKrupp said it had agreed to sell its elevator business to a private equity consortium composed of advent, cinven and German rag funds for 17.2 billion euros. The deal was completed on July 31. ThyssenKrupp said the divestiture of the elevator business unit, which has more than 50000 employees, was undoubtedly a difficult decision, but it was indispensable for the interests of the group as a whole.

One of the biggest acquisitions in Europe this year. According to last years results, the group was under pressure from a net financial debt of 7 billion euros and a pension debt of 9 billion euros.

According to caixin.com, the sale brought free cash flow of 15 billion euros (about 116.7 billion yuan) to the company. But ThyssenKrupp is unlikely to give up the elevator altogether. It is understood that according to the transaction agreement, ThyssenKrupp bought some shares of the elevator business after the sale for 1.25 billion euro.

According to CCTV news, Germanys NTV TV station reported that the world economic recession has caused many German enterprises to fall into financial crisis and close to bankruptcy. However, the wave of large-scale bankruptcy predicted by economic experts has not yet arrived. According to a survey released by creditreform, a German credit risk management consulting firm, in the first half of 2020, 8900 companies filed for bankruptcy in Germany, down 8.2% from last year. In the first half of 2019, the number of bankrupt companies in Germany reached 9690.

The number of bankruptcy filings has declined instead of rising, which is closely related to the economic stimulus plan and a series of intervention measures implemented by the federal government. According to relevant regulations, from March 1, 2020, all German enterprises affected by the epidemic will suspend bankruptcy applications. By October, the federal government hopes to provide assistance to businesses on the verge of bankruptcy, especially small and medium-sized enterprises.

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According to the relevant research of creditreform, the current number of registered bankruptcy applications can not fully reflect the current economic situation in Germany. During the period of Xinguan epidemic, the local courts of each state stopped accepting bankruptcy cases, the daily work of government departments was limited, and a large number of application documents were overstocked. At present, all kinds of bankruptcy applications have gradually entered the normal trial process. Professionals predict that in the coming months, the number of companies declared bankrupt will increase significantly. Only when normal production and operation are gradually restored in the late stage of the epidemic can German enterprises escape the bankruptcy crisis.

In order to avoid the risk of bankruptcy as much as possible, most enterprises choose the short-term working mode, while reducing the loss of assets, maintain the basic operation of each post, and try to avoid layoffs. Nevertheless, there are still many employees worried about unemployment. About a third of short-term workers are pessimistic about their career prospects and are worried that they may lose their jobs at any time, according to a study published today by the European Center for Economic Research (ZEW). According to the survey, only 27% of respondents believe that they can survive the crisis smoothly and keep their current jobs. Researcher Kaja mhring said: employees, especially those in precarious employment before the outbreak, are now more anxious. The risk of future unemployment is also relatively high. In particular, the restaurant, hotel and hotel industries, as well as workers in the art field, were more seriously affected by the epidemic than other industries. One third of the respondents thought that they might lose their jobs in the near future. Source: Daily Economic News Editor: Wang Xiaowu_ NF

In order to avoid the risk of bankruptcy as much as possible, most enterprises choose the short-term working mode, while reducing the loss of assets, maintain the basic operation of each post, and try to avoid layoffs. Nevertheless, there are still many employees worried about unemployment. About a third of short-term workers are pessimistic about their career prospects and are worried that they may lose their jobs at any time, according to a study published today by the European Center for Economic Research (ZEW).

According to the survey, only 27 percent of respondents believe they can successfully survive the crisis and stay in their current jobs. Especially those who were in unstable employment before the outbreak, they are more anxious and anxious now, researcher kajamhring said. The risk of unemployment in the future is relatively high. In particular, restaurant, hotel and hotel industry and art practitioners are more affected by the epidemic than other industries, and one third of respondents believe they may lose their jobs in the near future.