London: World’s largest steel producer ArcelorMittal on Thursday said it will trim its workforce by up to 9,000 by offering a voluntary separation programme.
The focus would be primarily on non-production employees, particularly those in SG & A (selling, general and administrative) functions across the globe, a statement from ArcelorMittal said.
“These programmes may involve up to 9,000 employees, approximately 3% of the total global workforce,” it added.
Hit by global economic meltdown that has led to a steep slump in demand for steel, the LN Mittal-led firm said its move to launch a voluntary separation programme for employees is to help “achieve the company’s stated aim of reducing SG & A expenditure by $1 billion in response to the current economic situation”.
The company said it is meeting its European Works Council today to present the voluntary separation programme to be launched across the group.
The steel major said it would run the programmes in “close collaboration” with stakeholders and in accordance with appropriate social considerations of the respective countries involved.
Commenting on the company’s move, Bernard Fontana, Executive Vice President and Member of ArcelorMittals Management Committee with responsibility for Human Resources said: “This has been a very difficult decision for the company to take as all of our employees are extremely important to us. Sadly, however, the global economic reality means that it is only sensible to adopt such measures.”
Fontana added that the company’s priority is now to meet with all its stakeholders to explain the reasons for the decision and to reassure them that the process will be carried out in accordance with all social considerations.
“We are very grateful for the professionalism and dedication of our employees, all of whom have played an important role in building ArcelorMittal,” he said.
Reeling under the waning demand for steel amid the global economic slowdown, ArcelorMittal earlier this month announced cutting its production by up to 30% in the fourth quarter.
The steel major did not also rule out reviewing changes in the size and product mix of the company’s proposed projects in India that entail an investment of about Rs80,000 crore.
India-born steel czar Mittal is reported to have suffered a $50 billion decline in the value of shares he holds in the company following the global financial meltdown.
In the process, Mittal’s own wealth has come down by over $50 billion to less than $15 billion.
Nevertheless, ArcelorMittal reported a 29% growth in net income at $3.8 billion for the third quarter of 2008 compared with net income of $3 billion in the September quarter of 2007.
Its sales for the third quarter ended 30 September increased by 38% to $35.2 billion from $25.5 billion in the same period a year ago.