Thyssenkrupp has announced 6,000 job cuts worldwide as part of a structural shakeup following the collapse of a proposed merger with Indian steel giants Tata (INA FASSBENDER)

Berlin (AFP) – Struggling German conglomerate Thyssenkrupp plunged into the red in its second quarter, posting a net loss of 86 million euros ($96 million) on Tuesday following news that it will slash 6,000 jobs.

The plunge into loss-making at the start of the year contrasted with a 250-million-euro profit in early 2018, reflecting the troubled waters the Essen-based group has found itself in since last summer.

On Friday, Thyssenkrupp announced 6,000 job cuts worldwide — including 4,000 in Germany — as part of a structural shakeup following the collapse of a proposed merger with Indian steel giants Tata.

The German group’s operating, or underlying profit (EBIT) fell 66 percent — or 283 million euros — year-on-year down to 145 million euros.

“In the steel sector, the historic low ebb of the river Rhine, lower demand from the automotive industry and the new collective agreement (with worker representatives) had a negative impact on earnings,” Thyssenkrupp said in a statement.

However, there was some good news as group-wide sales rose slightly, adding two percent to reach 10.6 billion euros.

Performance was lifted especially by the elevators division in the United States and Europe as order intake rose one percent, to 10.3 billion.

However, increased risk provisions related to a German anti-cartel investigation into steel prices burdened Thyssenkrupp’s accounts.

On Friday, CEO Guido Kerkhoff warned “we are building a new Thyssenkrupp… we are going to change a lot of things and it will not be an easy road”.

This was reflected by the group’s forecast net loss of between 1.1 and 1.2 billion euros for 2019.

Thyssenkrupp has abandoned a plan to split into two groups — “Industry” and “Materials” — but intends to list its highly profitable elevators business, valued at around 14 billion euros by analysts, on the stock market and adopt a holding structure.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.