Thyssenkrupp is in the midst of a painful restructuring exacerbated by the pandemic

Berlin (AFP) - Troubled German industrial giant Thyssenkrupp said Thursday it was slashing 5,000 more jobs than expected, bringing total cuts to 11,000 as the coronavirus pandemic takes a massive toll.

The group, which makes products from steel to submarines, elevators and car parts, employs more than 100,000 people worldwide.

It is in the midst of a painful restructuring that could see the historic company tap state aid as it scrambles to find a solution for its loss-making steel business.

News of the job cuts, set to stretch over several years, came as the group reported a 9.6-billion-euro ($11.3 billion) net profit for its 2019-2020 financial year that ended in September.

But the figure was largely down to the sale of its lucrative elevator division for 17.2 billion euros in February. Without it, the group actually made a net loss of 5.5 billion euros.

Revenues – excluding elevators – fell 15 percent year-on-year to 28.9 billion euros, partly because of a slump in demand from the auto industry after global lockdowns shuttered factories and showrooms during the first Covid-19 wave.

“The coronavirus pandemic is a massive stress test for Thyssenkrupp,” said CEO Martina Merz in a statement.

“We’re not yet where we need to be. The next steps could be more painful than the previous ones. But we will have to take them.”

In a conference call with reporters, she said the group hoped to avoid forced redundancies but that they couldn’t be “ruled out 100 percent”.

Thyssenkrupp said 3,600 jobs have already been shed so far this year.

- Steel woes -

Looking ahead, Thyssenkrupp expects to make a net loss of “over one billion euros” in its 2020-2021 financial year.

Sales are projected to grow “in the low to mid single-digit percentage”, depending on the recovery of the auto market as the pandemic evolves.

To counter the headwinds, Thyssenkrupp has indicated it is looking for partners to help shore up steel operations, which have for years suffered from cut-price competition from China and showed an adjusted operating loss of 946 million euros in 2019-2020.

Britain’s Liberty Steel, founded and led by Sanjeev Gupta, made an offer for the group’s steel activities last month.

There have also been discussions with Sweden’s SSAB and India’s Tata Steel.

Unions meanwhile are pushing for state participation in the group’s capital, hoping to tap into the German government’s huge coronavirus rescue funds.

Thyssenkrupp said it was studying various options and expected to announce a decision on its steel business “in spring 2021”.

The group’s shares, which have lost around 60 percent over the year, plunged 7.8 percent to 4.52 euros in Frankfurt trading by 1030 GMT.

Thyssenkrupp does not plan to pay out dividends this year.