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Evonik says recovery unlikely in 2024, plans 2,000 job cuts
Global Banking & Finance Review®
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(Reuters) – German chemicals group Evonik Industries said on Monday it expected no signs of a recovery in 2024 and announced up to 2,000 job cuts worldwide by 2026 in a bid to cut costs.
(Reuters) – German chemicals group Evonik Industries said on Monday it expected no signs of a recovery in 2024 and announced up to 2,000 job cuts worldwide by 2026 in a bid to cut costs.
The job cuts are expected to lead to reduction costs of 400 million euros annually after completion of the programme, the company said, adding that the majority of the cuts – some 1,500 – would be in Germany.
Evonik, whose products are used in items from animal feed and diapers to Pfizer/BioNTech’s COVID-19 vaccine, expects 2024 adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in the range of 1.7 billion to 2.0 billion euros ($1.84 billion – $2.17 billion).
This compares with the 1.66 billion euros it reported for 2023, which slightly missed analysts’ forecast of 1.7 billion euros in a company-provided poll.
“What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment,” said CEO Christian Kullmann in a statement.
Chemical companies have been under pressure for more than one year as they were forced to reduce inventories on lower demand from their industrial clients.
The group will propose an annual dividend of 1.17 euros per share, unchanged from the last year.
($1 = 0.9221 euros)
(Reporting by Anastasiia Kozlova and Matteo Allievi in Gdansk; editing by Rachel More)
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric used to evaluate a company's operating performance by measuring its profitability before accounting for non-operational expenses.
Job cuts refer to the reduction of employees within a company, often due to financial constraints or restructuring. This can lead to significant cost savings for the organization.
A dividend is a portion of a company's earnings distributed to shareholders, typically in cash or additional shares. It represents a way for companies to share profits with their investors.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly. It can lead to widespread economic downturns and is often triggered by various factors, including market instability.
Corporate strategy refers to the overall plan and direction of a company, focusing on long-term goals and how to achieve competitive advantage in the market.
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