400 jobs to go at British Steel as business streamlines office roles

By Scunthorpe Telegraph | Posted: 14 Sep 2018

A total of 400 jobs look set to be axed at British Steel as it streamlines to ensure long-term growth.

Managerial, professional and administrative roles have been identified across the group, but reassurances have been given over the significant investments being made to improve manufacturing performance.

Roland Junck, British Steel’s executive chairman, said: “Following our launch and early growth as a new company, it’s important our business continues to evolve. It’s imperative we enhance our products and services and become more competitive so we can increase our foothold in the market.

“We’ve already committed £120 million to capital expenditure projects and are pressing ahead with the £50 million upgrade to our Scunthorpe Rod Mill, which we announced in July. However, the pace of change we need in this challenging industry requires further and continued investment along with more agile and efficient operations.

“To help us achieve this, we have to make difficult decisions and our plans unfortunately include the proposed reduction of 400 roles across our global workforce.

“We’re sad to be making this announcement, particularly for our colleagues who could be affected. The skill and dedication of our employees has helped us come a long way in a short period of time. However, it’s vital our transformation continues so we can build a sustainable future for the whole business, nearly 5,000 employees and many more people in the supply chain. We’re confident these proposals will help achieve this."

Read more: Region's output is leading the UK as order book strength breeds further confidence

No breakdown of where the proposed roles will be lost is yet available, but with Scunthorpe the company's head office, it is anticipated it will shoulder most casualties. 

“We’ll further discuss our proposals, which would consider applications for voluntary redundancy, with senior union representatives," Mr Junck, pictured right, said. "We’ll ensure this process is handled in a sensitive manner. We haven’t set any deadlines but aim to keep the period of uncertainty for our people as short as we can. 

“We know this will be a worrying time for many and we’ll do everything possible to ensure our people continue to get the support they deserve, now and in the future.”

Roles are in operations throughout the UK, Ireland, France and the Netherlands. No closures are being considered as part of the process.

Read more: British Steel's rail investment and innovation to be showcased at InnoTrans 2018

Since its launch in 2016, British Steel – which employs more than 5,000 people across the globe – has turned a business losing tens of millions of pounds a year into one making profit.

In the last year of Tata, the business made a loss of £79 million. In British Steel’s first year, 2017, it secured a profit of £47 million – a £126 million turnaround. This summer it announced earnings of £68 million, although a £47 million cost of a blast furnace chill is being pursued through an insurance claim.  The first quarter of the current financial year revealed a £21 million profit. 

Gerald Reichmann, British Steel’s chief financial officer, said: “We’ve made a strong start to life as British Steel but our external environment is constantly changing. For example, raw materials are all traded in US dollars, so the weakening of the pound and euro have implications for us. Like any business we need to be able to flex and adapt to these changes.

“Strong market conditions support the approach we’re taking – we have a robust order book and continue to secure significant contracts with customers, old and new, around the world.

“It’s unfortunate we need to go through the proposed redundancy process but by focusing on profitable, niche products I’m confident we’ll create a long-term future for our business and the communities in which we operate.”

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