Pressured by rising energy costs, the German chemical giant BASF announced on Friday the elimination of 3,300 jobs, during the presentation of its 2022 results. Its historic site in Ludwigshafen (south-west of Germany), where its headquarters are located, is affected by the closure of several production units which is part of an economy plan aimed at Europe. Most of the job cuts must concern German employees. Contacted, its Swiss branch indicates that it cannot give details on “the concrete consequences for BASF in Switzerland”. The company is present in Bâle, Kaisten (AG), Monthey (VS), Pfäffikon (SZ) and Schweizerhalle (BL).
In January, the chemical industry giant warned of its difficulties by announcing a deficit anticipated of 1.37 billion euros (1.36 billion francs). Finally, he announced this Friday a loss net of 627 million euros (621 million francs). The cessation of activities in Russia of its energy subsidiary Wintershall Dea, involved in oil and gas exploration and production, resulted in charges of 6.3 billion euros (6.2 billion francs).
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BASF was also one of the promoters of the Nord Stream 2 gas pipeline project abandoned following the Russian aggression in Ukraine, and is one of the owners of Nord Stream 1, which is at a standstill. Heavily exposed to Russian gas in its activities, the group also had to deal with the increase in its production costs in Europe with soaring energy and raw material prices.
In a press release, its director general Martin Brudermüller also points to administrative difficulties: “The competitiveness of the European region is increasingly suffering from excessive regulation […] and, above all, high costs for most factors of production […] high energy prices are now weighing on profitability and competitiveness in Europe.”
Savings of 495 million francs per year
In Ludwigshafen, where BASF employs nearly 39,000 people, out of the 111,481 that the group had in December 2022, 700 production jobs should be eliminated by the end of 2026. On the place where it is installed since its Founded 158 years ago, the company plans in particular to close one of its two units producing caprolactam, a component used for the production of plastic and fibers, as well as associated units, specializing in fertilizers. The company believes that its Antwerp plant in Belgium alone can supply the European market.
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The production sites of various chemical compounds are thus targeted, for some because of insufficient demand on the European market and underutilization of the facilities. But in the explanations given by the group, the main factor remains the increase in production costs. Units located in China, South Korea and the United States should make it possible to offset the production of the units that will be closed.
The group is also planning 2,600 additional job cuts in its sales departments, in its research and development activities and through the reorganization of its management structures. Most of these measures should affect the group’s German employees. According to BASF, they should save 500 million euros (495 million francs) in non-production areas from 2025, and 200 million more from 2027 on the Ludwigshafen site.