Corus To Slash 3,500 Jobs

Steel giant said Monday that it will cut 3,500 jobs worldwide, with 2,500 jobs going in Britain alone, in an attempt to shore up its finances.

LONDON (AP) -- Steel giant Corus said Monday it will cut 3,500 jobs around the world, with 2,500 going in Britain alone, in an attempt to shore up its finances which have been battered by the sharp fall in global demand.

Corus, owned by Indian firm Tata Steel, announced a series of cost cuts including mothballing a mill in South Wales and restructuring several parts of its business. The company employs around 24,000 people worldwide.

Corus said it will try to achieve the job losses through voluntary redundancies and hoped the job cuts, along with other measures, would help raise operating profits by more than 200 million pounds per year ($276 million).

Corus also announced it was in advanced discussions on the sale of its majority stake in its cast products business based in Teesside, England. This business employs around 2,000 workers who were not involved in the job loss announcement.

Corus' chief executive Philippe Varin said the changes were "essential" for the future of the business.

The British workers were given the grim news in a series of meetings earlier.

John Wilson, senior officer of the GMB union, said the decision was "a body blow" for manufacturing in Britain, which is already reeling from the deepest recession in nearly 30 years.

Steel companies around the world have been hit hard by falling global demand from a range of businesses, including carmakers, shipbuilders and construction. The fall in demand has also pushed steel prices down, hitting profit margins.

Given the global economic downturn, Corus has asked for some financial help from the British government to help provide new skills to its workforce.

Company spokesman David Litterick said talks with the British government about providing help to the newly unemployed are ongoing. "We are still hopeful that something will be agreed," he said.

The unions said it was imperative the government provided a lifeline to workers.

"It is essential that the UK Government offers this industry the same support being offered to the banking sector because, just like banks, steel is the bedrock of our economy," said GMB's Wilson.

And Derek Simpson, joint leader of Unite, said the union will not accept compulsory redundancies, adding: "We understand that Corus do face difficulties but before this recession Corus had been making extremely healthy profits. Our members have supported Corus through good times and bad and now expect Corus to support them."

Corus was formed in 1999 via the merger of British Steel and Koninklijke Hoogovens. In 2007, it was bought out by Tata.

Corus' announcement came on another day of jobs gloom in the retail and banking sectors, with administrators being appointed to shoe chains Barratts and PriceLess, where 5,450 staff work, and 95 job cuts announced at the troubled Land of Leather chain.

More in Supply Chain