BASF to reduce workforce by 6,000 in cost saving programme

Author: Jonathan Lopez

2019/06/27

BRUSSELS (ICIS)--BASF is to reduce its headcount by nearly 5% until the end of 2021, or 6,000 employees, the German chemicals major said on Thursday.

"As a result, the company expects savings of €300m, as part of the ongoing excellence program," it said.

BASF employs globally around 122,000 workers.

It did not say how the reduction in headcount would be distributed by regions.

It did not clarify either whether the reduction in headcount would be undertaken via a redundancy programme or early retirements.

The company said it expects its ongoing cost savings programme, of which this is part, to contribute €2bn/year to earnings from the end of 2021 onwards.

BASF said it had agreed with employees’ representatives at its flagship site of Ludwigshafen in Germany to bring forward negotiations for a new employment agreement to the first half of 2020.

The current agreement is valid until the end of 2020.

“BASF is streamlining its administration, sharpening the roles of services and regions and simplifying procedures and processes,” it said.

“This decrease [in headcount] results from the organisational simplification and from efficiency gains in administration and services as well as in the operating divisions.”

The company said, however, that it would continue requiring “additional employees” in departments focused on digitalisation or production, “depending on future” growth rates, without clarifying further.

As part of the saving costs programme, the German major said its Corporate Center would employ “less than 1,000 employees”, while around 29,000 employees will now be working “in cross-functional” service units.

The new structure will comprise the segments Global Engineering Services, Global Digital Services, Global Procurement, and the newly created Global Business Services, employing 8,000 and to be led by Marc Ehrhardt, currently head of the Finance division.

The first changes will take effect on 1 January 2020.

BASF workforce regional distribution

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Top picture: BASF's Ludwigshafen site by the Rhine
Pictures source: BASF