By Dipankar De Sarkar, London,
January 26, 2009 (IANS)
steelmaker Corus Monday announced it was shedding
3,500 jobs in a cost-cutting move described by
a union boss as dealing a body blow
to recession-hit Britain. Up to 2,500 of the redundancies
were expected in Corus's British plants. The job
losses were announced as part of a series of strategic
and structural measures aimed at improving the
competitive position of the Anglo-Dutch company
that is owned by Tata Steel.
Corus, Britain's largest
and Europe's No. 2 steelmaker, said the measures
are expected to yield about 600 million pounds
in cash benefits in the six months to the end
of March and bring annual improvements in
operating profit of more than 200 mn pounds.
It will also put around 3,500 jobs at risk
around the company as a whole, Corus said
in a statement following media reports that 2,500
of the company's 24,000 British workforce would
go in the cuts.
With unemployment in Britain
touching 1.92 million last year, British union
bosses were expected to meet Corus management
this week to discuss the plans. Britain was officially
declared to be in a state of recession last week,
with figures showing the economy shrank by 1.5%
in the final three months of last year, following
a 0.6% fall in the third quarter of 2008.
Corus, which was bought by
Tata for £6.7 billion two years ago, has
suffered in the current economic downturn, particularly
because of a slump in the construction and automotive
industries.Elements of the initiative comprise
long-term plans that were already under consideration,
but which have been brought forward as a result
of the slowdown, said the company, which
employs 42,000 people around the world.
The company said it will
make every effort to achieve the job losses through
voluntary redundancies, whilst retaining critical
skills in the business. Corus CEO Philippe Varin
said the proposed changes are essential
for the future of the business.
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, Varin added.
Company spokesman David Litterick
said talks with the British government about providing
help to the newly unemployed are ongoing, adding,
We are still hopeful that something will
John Wilson, a spokesman
official Britain's general trade union GMB, said
the Corus move was "a body blow" for
manufacturing in Britain. "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," he added.