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Evonik announces 2000 layoffs, bleak outlook for 2024- Republic World

Evonik Industries job cuts | Image:Evonik Industries

Evonik Industries job cuts: German chemicals giant Evonik Industries revealed on Monday that it anticipates no signs of recovery in 2024 and disclosed plans for up to 2,000 job reductions globally by 2026 as part of a cost-cutting initiative.

The company expects these job cuts to yield annual savings of €400 million, with the majority—approximately 1,500 positions—expected to be eliminated in Germany.

Evonik, renowned for its diverse product portfolio ranging from animal feed to pharmaceutical ingredients such as those used in Pfizer/BioNTech’s COVID-19 vaccine, projects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2024 to be within the range of €1.7 billion to €2.0 billin). This outlook contrasts with its 2023 EBITDA of 1$.66 billion, falling short of the analysts’ expected 1.7 billion.

JP Morgan analysts commented that Evonik’s 2024 guidance, closely aligned with market consensus, should provide reassurance to investors amid challenging market conditions.

CEO Christian Kullmann underscored the gravity of the situation, stating, “What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment.”

Chemical companies, including Evonik, have grappled with pressure for over a year, compelled to scale back inventories due to reduced demand from industrial customers.

Despite the downturn, Evonik will propose an annual dividend of €1.17 per share, consistent with the previous year.

Reflecting the industry-wide challenges, Evonik’s 2023 sales contracted by 17 per cent to €15.3 billion. Notably, sales in its performance materials division, contributing around 13 per cent of the total, plummeted by 22 per cent to €2.55 billion following the divestment of a production site in Luelsdorf last June.

In response to the announcement, Evonik shares surged 1 per cent at 0826 GMT, following a 3.7 per cent uptick at the opening.

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