Tata Steel to Axe up to 1,500 Jobs in Britain

May 20, 2011
The company will invest $649 million in a five-year plan to turn around its long products business to target 'high value' markets.

Blaming weak demand for its products, Indian steelmaker Tata Steel will cut up to 1,500 jobs at two sites in northeastern England, the company announced on May 20.

Tata said it would close or mothball its Scunthorpe plant, risking the loss of 1,200 positions, and would cut another 300 posts in Teeside.

The job losses will occur at Tata's loss-making British long products business, which produces bars, rods and rails -- mostly for the construction sector.

At the same time, Tata announced it would invest £400 million (U$S649 million) in a five-year plan to try and turn around the long products business to target "high value" markets.

"The long products business as a whole has continued to make losses over the last two years. The decline in some major markets, particularly the construction sector, has been a key factor," the company said.

"Demand for structural steel in the UK is only two-thirds of the 2007 level and is not expected to fully recover within the next five years."

It added: "As a consequence, the business has proposed a plan to further reduce costs, focus on products that create value and improve its ability to respond quickly to demand fluctuations.

"This strategy includes a proposal to close or mothball parts of the Scunthorpe plant and puts at risk 1,200 jobs at Scunthorpe and 300 jobs at its Teesside sites," Tata said.

The sites were acquired by Tata in 2007 as part of its $13.7-billion purchase of Anglo-Dutch steelmaker Corus.

"The continuing weakness in market conditions is one of the main reasons why we are setting out on this difficult course of action," said Karl-Ulrich Khler, boss of Tata Steel's European operations.

Copyright Agence France-Presse, 2011

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