Tata Steel will cut 400 jobs at the Port Talbot plant in South Wales as part of its plan to trim costs and increase competitiveness in the strip products business in Britain.
According to The Guardian, the job cuts will be made in response to a fall in demand and prices for steel in Europe, which already pressured the company into slashing almost 600 jobs in November 2012 at Port Talbot.
Tata Steel had invested more than £250 million in the strip products business over the last two years but expects steel demand to be down for several years.
Karl Koehler, Chief Executive of Tata Steel Europe, said in a statement the measures were “vital if we are to build a competitive future for our Strip Products business in the UK”.
“Our business rates in the UK are much higher than other EU countries and our UK energy costs will remain uncompetitive until new mitigation measures come into effect. These proposed changes then are vital if we are to build a competitive future for our strip products business in the UK.”
The company – which is part of the Indian conglomerate Tata – has started a consultation process that will last at least 45 days with its employees at the site, which employs almost 4,000 workers.
Unions warned that the cuts should not be allowed to threaten safety at the plant and urged the Government to support the steel industry.
“We recognise the company has been dealing with a long-term downturn in European steel markets for more than five years. However we have also expressed our own concerns about possible undermanning within strip products and in Port Talbot in particular,” said Roy Rickhuss, who chairs the UK trade unions’ steel committee.
“This news also demonstrates that despite the Government’s trumpeting of economic recovery, the steel sector remains under real pressure. This sector, vital for so much of British manufacturing, must be an area of real focus for the UK’s industrial policy.”
A spokesman for Tata said the company could not rule out compulsory redundancies because it needs to cut jobs while keeping hold of workers with specific skills.