German steel giant Thyssenkrupp to cut 5,000 more jobs after heavy losses

German steel giant Thyssenkrupp said on Thursday that it recorded a net loss of 5.5 billion euros (6.5 billion U.S. dollars) in the company’s fiscal year 2019/2020, after a net loss of 1.1 billion euros last year.

“To address long-term market developments and the effects of coronavirus,” Thyssenkrupp announced to cut 5,000 more jobs, bringing the total of its layoffs to 11,000.

Net sales dropped by 15 percent year-on-year to 28.9 billion euros. However, with the restart of production by many of Thyssenkrupp’s customers, business performance in the fourth quarter “increasingly stabilized.”

“The coronavirus pandemic is a massive stress test for Thyssenkrupp,” said Martina Merz, chief executive officer (CEO) of Thyssenkrupp AG, in a statement.

Thyssenkrupp’s balance sheet profited from the proceeds from the sale of the elevator division, which amounted to 15 billion euros. In 2018, Thyssenkrupp Elevator opened its tallest elevator test tower to date in southern China’s city of Zhongshan, with a height of 248 meters.

In the company’s industrial components business, large-diameter anti-friction slewing rings “continued to perform strongly,” in particular due to the good order levels from the wind energy sector in Germany and China, according to Thyssenkrupp.

Thyssenkrupp’s automotive business “suffered a significant drop in demand” due to the COVID-19 pandemic at the beginning of the fiscal year, the company noted. Total sales fell by 13 percent year-on-year to 4.7 billion euros.

The steel business in Europe continued to be impacted by the “extremely challenging situation on the steel market,” Thyssenkrupp said. The negative effects of the coronavirus pandemic on the steel business were “increasingly felt” in the course of the third quarter.

Sales in Thyssenkrupp’s European steel business declined 20 percent year-on-year to around 7.3 billion euros, the company noted.

For the fiscal year 2020/2021, Thyssenkrupp is expecting sales to grow in the low to mid-single-digit percentage range. Nevertheless, the company forecasted continuing net losses of more than one billion euros. (1 euro = 1.18 U.S. dollars)