Evonik reorganizes administration: 2000 jobs to be cut
Evonik is restructuring its administration and cutting up to 2,000 jobs worldwide, including around 1,500 in Germany, to reduce costs and expects a moderate recovery despite a difficult previous year, while the decline in sales and impairments led to a net loss.
The chemical company Evonik is cutting many jobs as part of a large-scale administrative reorganization. “Up to 2,000 jobs are to be cut worldwide, including a disproportionate number of management positions,” the Group announced on Monday. In Germany, around 1500 jobs will be affected. The Group employs a total of 33,000 people. Once the program is completed in 2026, annual costs are expected to be around 400 million euros lower than before. The first effects will already be felt in 2024.
Evonik announced in September that it wanted to significantly streamline its administration on the basis of a model to be developed. “The first phase has now been completed,” it said on Monday. The number of hierarchical levels below the Executive Board will be reduced to a maximum of six. Review and approval procedures are to be significantly accelerated.
Evonik enters the new year cautiously
Evonik does not expect a quick recovery after a difficult 2023. “We must not delude ourselves, even if there are slight signs of recovery: What we are currently experiencing is not an economic fluctuation, but a massive, consistent change in our economic environment,” said Group CEO Christian Kullmann on Monday. With expected sales of 15 bio. to 17 bio. EUR, he is aiming for earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for special effects of 1.7 billion to 2.0 billion EUR. That would be at least a slight improvement in operating profit.
Last year, Evonik suffered a 17 percent drop in sales to just under 15.3 bio. EUR and operating profit fell by a third to 1.66 bio. EUR. The bottom line was a loss of 465 mio. EUR – after a surplus of 540 mio. EUR in the previous year. The loss is also the result of impairment losses on parts of the business.
