Tata Steel is set to cut 3,000 jobs in Europe. The Indian-owned company says issues of global oversupply and stagnant EU demand have been “compounded by trade conflicts which have turned the European market into a dumping ground for the world’s excess steel capacity”. The announcement comes two months after the steel giant said it planned to shutter two UK operations, jeopardising 400 jobs. In May, the EU blocked a merger between Tata Steel and German rival Thyssenkrupp.
Tata Steel layoffs in Europe is a combination of the slump in steel industry led by a tepid manufacturing growth in the whole of EU. Steel consumption fell by 2.5% year-on-year in the first quarter of 2019. The drop in manufacturing is due to weakened exports and investment. Industry estimates says that steel consumption will only stabilize, but no rebound. Tata Steel will also feel the brunt of Brexit. The rest of EU is already seeing a challenge from US due to the trade war. The interesting thing is that the company is saying that the layoffs will be of white collar workers in the office and not factory workers. This might be due to the strong labor union and likely political opposition in Britain – K Yatish Rajawat
I feel for the workers who will lose their jobs. I don’t think there’s any economy that’s really booming right now. There’s just isn’t enough manufacturing and construction activity to absorb all the steel capacity in the world. So this was inevitable. There’s a pushback against globalization, so internationalization will have to perhaps take a back seat for now. Unless economic activity revives, both in India and elsewhere, more job cuts are unavoidable. Governments of the world have to stop superficial demagoguery and start doing hardcore nation-building – Anupam Choudhury