Tata Steel announces 1,500 job cuts

Steel giant Tata has announced it will be making 1,500 job cuts across plants in northern England. 1,200 jobs will be lost at its Scunthorpe plant while a further 300 positions will be lost at the Teesside sites.

The proposals will also see sections of the Scunthorpe plant being closed down or mothballed as part of a long-term mission to turn around Tata’s long product (bars, rods, wires, rails and tubes) business in Europe.

The company blamed the restructuring on a reduction in demand for these products of a third over the last four years. It does not anticipate a quick recovery from the downturn.

Multi-million pound investment

The cuts come despite the company committing to a £400m investment programme in the area over the next five years.

CEO of Tata Steel’s European operations, Karl-Ulrich Kohler, pledged that the company would aim to support those effected by the job losses.

“We are aware that our employees and their families will experience a very unsettling few months as a result of this announcement. We will do everything we can to provide them with support and assistance,” he said.

Union reaction

Michael Leahy of the trade union Community backed the proposals from Tata to secure the future of the steel industry in the UK: “We are, of course, extremely disappointed at the prospect of further job losses, coming as they do on the back of earlier cutbacks.

“However, difficult though the current position is for all concerned, we recognise that this is part of a wider strategic review of the business aimed at securing its long-term viability and access to new markets. To that end, we welcome the commitment to invest £400m over the next five years.”

Inevitably the news of the job losses put more focus on the Government and the disappointing growth figures over the last year. Paul Reuter of Unite said: “Today’s announcement highlights just how fragile our economy is and the coalition Government should not be so quick to start talking about growth and recovery.”

Labour’s shadow industry minister, Ian Lucas, said: “Today’s announcement is a hugely worrying sign for industry in the UK, and a blow to the people of Scunthorpe and Teesside. This seriously calls into question how the Tory-led Government is facing up to the challenges facing the economy, which has flatlined in the last six months instead of moving towards significant growth.”

Tata employs 21,000 people in the UK in sites up and down the country. Tata recently announced multi-million pound investments for sites in Scotland and Wales.

The Clydesbridge plant near Glasgow was promised an £8m investment in April, creating 26 jobs, while a £53m investment in the Port Talbot plant, which employs 7,500 workers, will aim to improve the efficiency of the manufacturing process.

In 2010 Tata announced a turnover of £14bn across all its operations in 26 countries.