Eurozone slump costs 900 jobs in UK steel industry

Tata cuts jobs in face of an expected 10 per cent slide in European demand

British workers were revealed as the latest victims of the eurozone recession yesterday, as Tata Steel yesterday announced it will cut 900 jobs across the UK, almost 4 per cent of its British workforce, in response to rising losses and plunging demand in its all-important European markets.

Around 580 jobs will go at the Indian group's Port Talbot plant in South Wales, with most redundancies coming from management and administrative posts. Another 155 redundancies will be made in Yorkshire, 120 in the West Midlands and 30 on Teesside.

In a further blow to the UK economy, which many analysts expect to contract again in the fourth quarter of the year, there are also plans to close 12 steel finishing and processing plants in England and Wales. The bad news was slightly offset, however, by Tata's announcement that it will push ahead with the restart of a blast furnace in Port Talbot next year as part of a £250m investment programme.

The steel firm, which supplies the construction, car manufacturing and aerospace industries, reported a second-quarter loss of $67m (£41m) this month. There has been a four-year decline in demand for steel across Europe, which accounts for two-thirds of Tata's 28 million tonne capacity. It forecast demand across Europe would fall by another 10 per cent this year.

Earlier this month, official figures showed that the eurozone returned to recession in the third quarter of 2012, contracting by 0.1 per cent after a 0.2 per cent shrinkage in the previous three months. The outlook for 2013 is equally bad, as governments across the 17-member bloc push on with synchronised austerity programmes and grapple with an unresolved banking and sovereign debt crisis.

Karl Kohler, Tata's chief executive of European operations, expressed his sympathy for the UK workers who will be made redundant, but stressed that the restructuring was necessary.

"These restructuring proposals will help make our business more successful and sustainable, but the job losses are regrettable and I know this will be a difficult and unsettling time for the employees and their families affected," he said.

As well as an economic slide in Europe, the global steel industry has also been struggling due to a slowdown in the Chinese economy, which grew at a rate of 7.4 per cent in the third quarter, down from the 10 per cent rate seen over the past three decades.

The world's largest steel manufacturer, ArcelorMittal, recently reported a quarterly loss. And Japan's Nippon Steel & Sumitomo Metal Corporation has warned that profit in the second half of 2012/13 will be down by more than 50 per cent.

The Unite union secretary for Wales, Andy Richards, called the Tata job losses "devastating news" for an industry that has still not recovered from the shocks of the 1980s. He said: "It is a dark day for Welsh workers and for the steel industry in Wales – another twist in the knife of decimation started by Thatcher over 30 years ago."

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific