Wacker Chemie AG plans to slash more than 1,000 jobs by the end of 2022 as part of an efficiency program called Shape the Future that aims to save the company about $270 million each year.
A Feb. 20 news release announcing the move comes less than a month after the chemical company reported a loss of $680 million in its preliminary figures for 2019.
Revenue fell to $5.32 billion, compared to $5.37 billion the prior year, partly caused by lower prices for solar-grade polysilicon and standard silicones.
Wacker officials plan to reduce material costs and in-house services to create a leaner company structure.
The pending job cuts will affect administrative departments and the indirect, non-operational functions of Munich-based Wacker's business divisions. More than 80 percent of the reductions will be made at German facilities, which employ about 10,000 of Wacker's 14,500 employees.
Wacker officials said they will work with employee representatives to reduce the work force in a socially responsible manner: through retirement, semi-retirement, and severance agreements. If the measures are successful, the company can avoid compulsory layoffs.
"We are preparing for a harsher competitive environment — both in our polysilicon business and at our chemical divisions," CEO Rudolf Staudigl said in a statement. "Shape the Future is a comprehensive approach. Our aim is not only to achieve significant cost savings, but also to decisively strengthen Wacker for tomorrow's challenges and secure a long-term competitive edge."
The first outline of the restructuring plan has been presented to employees and is up for discussion and evaluation, according to Christian Hartel, an executive board member.
"We will continue to work closely on this with employee representatives and enter into constructive negotiations promptly," Hartel said. "We are confident of finding good and fair solutions to achieve our objectives."