Plastics equipment manufacturer KraussMaffei Group GmbH will lay off 430 workers in Germany, nearly 8.4 percent of KM's total workforce of 5,134.
KraussMaffei signed an agreement Jan. 31 with its unionized workers, the KM Trade Union Organization, for the reduction. The company and the union have negotiated severance pay, compensation standards and transitional placement, according to a Feb. 4 announcement by the KraussMaffei board of directors.
KraussMaffei, owned since 2016 by state-owned ChemChina, is listed on the Shanghai stock exchange as Krauss-Maffei Co. Ltd. The company makes injection molding machines, extruders for pipe and profiles, compounding extruders and polyurethane processing machinery.
According to the announcement, the reason for the job cuts is a changing market for plastics machinery caused by the decline in orders and sales, plus high labor costs. Since 2019, KM has faced significant challenges in demand from several markets, including automotive and packaging.
KraussMaffei also has been impacted by international trade issues, including the U.S.-China trade war and the United Kingdom's exit from the European Union, the announcement said.
Of the 430 job cuts, plans call for 334 positions to be reduced by the end of 2020, 76 in 2021 and 20 in 2022. KM management will clarify the specific people involved with the cuts in 2021 and 2022 at a later date, based on the company's economic situation at that time.
The announcement said that KM officials made the move to reduce production costs, optimize the cost structure, and improve the machinery maker's financial position and competitiveness.