Corus to cut 3,500 jobs

London -Steel maker Corus is to cut 3500 jobs from its workforce of around 42,000 worldwide, as part of a package of strategic measures to improve its competitive position in the wake of the global economic downturn. The initiative focuses on three areas: divestments, asset restructuring and a company-wide efficiency and overhead review.

Corus has reportedly confirmed that around 1,100 jobs will go in south Wales, with 1,400 jobs to be cut in the rest of the UK. The cutbacks include the mothballing of the company's Llanwern hot strip mill and the restructuring of its engineering steels operations into two businesses - a speciality steels business at Stocksbridge fed by electric furnace steel from Rotherham and a bar business at Rotherham with steel sourced from its integrated works at Scunthorpe. 

Corus is also divesting its aluminium smelters in Germany and the Netherlands, which will see a further 1,000 jobs go, and is in talks on the sale of its majority stake in Teesside Cast Products. The latter move, it stated, would "bring clarity to the future of the Teesside operations beyond the current offtake agreement."

The steel maker has also launched a company-wide efficiency improvement review, including a review of support functions such as IT, finance and HR, with a target to reduce costs in these areas by around 20%. The company's distribution, building systems and tubes activities will also be streamlined.

According to Corus, the overall cutbacks are part of long-term plans, which have been brought forward as a result of the slowdown and are intended to improve annual operating profit of more than £200 million. The company added that it would try to achieve the job losses through voluntary redundancies, whilst retaining critical skills in the business.

"The structural changes we are proposing are essential for the future of the business," said Corus CEO Philippe Varin . "The company will keep its focus on priority areas such as training, research and product development, which, together with today's initiative, will ensure Corus is in the best possible shape to compete strongly in the future."

Corus, a subsidiary of Tata Steel, is Europe's second largest steel producer with annual revenues of more than £12 billion and crude steel production of about 20 million tonnes. With main steelmaking operations primarily in the UK and the Netherlands, Corus supplies steel and related services to the construction, automotive, packaging, mechanical engineering and other markets worldwide.