Evonik Job Cuts and Cost Savings

Evonik, a German chemicals company, has revealed its plans to cut up to 2,000 jobs, equivalent to around 6% of its workforce, in a bid to reduce costs following a narrowed net loss in the fourth quarter.

Job Reductions and Cost Saving Measures

Evonik stated on Monday that it does not anticipate an economic recovery in the current year and aims to slash up to 2,000 jobs by 2026 as part of its cost-cutting strategy and to implement a new organizational framework. Out of these job cuts, 1,500 positions are expected to be eliminated in Germany.

The company disclosed that it anticipates annual cost savings of approximately 400 million euros ($433.6 million) by the end of 2026.

Financial Performance

In the fourth quarter, Evonik reported a net loss of EUR146 million, an improvement from the EUR284 million loss recorded in the same period the previous year. Sales saw a decline of 17% to EUR3.60 billion, accompanied by increased financial expenses and taxes. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 24%, totaling EUR312 million.

Despite these challenges, Evonik announced that it would maintain its dividend at EUR1.17 per share.

Future Projections

Looking ahead to 2024, Evonik has forecasted an adjusted EBITDA ranging between EUR1.7 billion and EUR2.0 billion, with sales expected to fall within the EUR15 billion to EUR17 billion bracket.

Chief Executive Christian Kullmann commented, "What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment."

It seems evident that Evonik is navigating through a period of transformation and adaptation in response to the evolving business landscape.