British Steel to cut 10% of its workforce

Reports are coming in that Scunthorpe-based British Steel is cutting almost 10% of its workforce in what is being described as 'an efficiency drive'. The company claims that redundancies will be made in managerial and administrative roles across the company's UK, Irish, French and Netherlands operations. Production sites are not being closed.

An article on the Daily Telegraph's website, a leading UK newspaper, is saying that British Steel is blaming currency changes, which have pushed up the cost of raw materials.

In July the company announced that annual sales had risen by £200 million to £1.4 billion and that profits were up 50% to £68 million.

Despite the job losses, the company was still 'pressing ahead' with a planned £170 million investment plan.

Job creation and job losses at British Steel has been a bit of a seesaw. When Greybull Capital acquired the business from Tata Steel UK for just £1, it slashed 1,200 and asked staff to take a pay cut to help the business survive. As the company's prospects brightened, 1,000 jobs were added and salaries increased, but now it all looks a little bit short-lived.

According to the National Trade Union Steel Co-ordinating Committee, the job losses (which British Steel hopes will consist of some voluntary redundancies) will be disappointing for the company having just celebrated Q1 profits of £21 million.

Other papers, notably the tabloid Daily Star, brings Donald Trump's tariffs into the picture and and then later quotes Scunthorpe MP Nic Dakin who has criticised the British Government for not taking any steps to level the playing field for the UK steel industry. According to Dakin, the Government has dragged its feet on improving procurement, tackling unequal energy costs and high business costs and supporting capital investment.