British Steel has today announced it’s undergoing a ‘streamlining process’, which could lead to the loss of 400 jobs.
The company says is taking a number of further steps to secure a sustainable future, which includes the proposed reduction of 400 managerial, professional and administrative roles at its operations throughout the UK, Ireland, France and the Netherlands.
Other steps include continuing to improve manufacturing performance and increasing turnover through strong sales.
No closures are being considered as part of the process and at the time of writing it is unknown how many roles could be lost at its Scunthorpe site.
Roland Junck, British Steel’s Executive Chairman, said: “Following our launch and early growth as a new company, it’s important our business continues to evolve.
“We’ve already committed £120 million to capital expenditure projects and are pressing ahead with the £50 million upgrade to our Scunthorpe Rod Mill, which we announced in July.
“However, the pace of change we need in this challenging industry requires further and continued investment along with more agile and efficient operations.
“To help us achieve this, we have to make difficult decisions and our plans unfortunately include the proposed reduction of 400 roles across our global workforce.”
Since its launch in 2016, British Steel – which employs more than 5,000 people across the globe – has turned a business losing tens of millions of pounds a year into one making profit.
Under previous ownership in FY16, the business made a loss of £79 million. In British Steel’s first year, FY17, it secured a profit of £47 million – a £126 million turnaround.
This summer it announced an EBITDA of £68 million pro forma for FY18 (excluding the £47m one-off cost of a blast furnace chill for which the company is pursuing an insurance claim). It reported a profit of £21 million for Q1 FY19.
Gerald Reichmann, British Steel’s Chief Financial Officer, said: “We’ve made a strong start to life as British Steel but our external environment is constantly changing.
“It’s unfortunate we need to go through the proposed redundancy process but by focusing on profitable, niche products I’m confident we’ll create a long-term future for our business and the communities in which we operate.”