The adverse economic impact of COVID-19 on the steel industry has forced steelmakers like ArcelorMittal to take aggressive cost-saving actions to reduce the negative effects brought on by the pandemic.
Over the past few months, ArcelorMittal has made workforce reductions, cut production, and idled furnaces in response to significantly lowered steel demand.
Now, the company plans to make additional changes wherein salaried employees will be affected by permanent workforce cuts so that the business can remain competitive and sustainable, it told employees in an internal memo this week.
Those affected by the workforce reduction will be notified on July 24, the company said in the memo.
According to sources familiar with the matter, the permanent employment cuts will cover those previously laid off and may also include additional employees.
The steelmaker began adjusting production and fixed costs along with carrying out cost-saving efforts since March, which included the layoffs of both salaried and hourly employees in April.
The workforce announcement follows the company’s blast furnace D explosion at Burns Harbor on July 16 when the furnace was shut down immediately. The explosion was caused when a dome from one of the bast furnaces ruptured, causing severe structural damage.
Moreover, it’s likely the blast furnace will remain shut down, for at least 6-8 weeks, sources close to the event told Davis Index.
The Burns Harbor plant comprises two blast furnaces of similar working volume and total steelmaking capacity of approximately 5mn mt per year.