Chemicals producer BASF to axe jobs at energy intensive production sites in Germany
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Chemicals company BASF will cut up to 2,600 jobs worldwide due to cost pressure from the energy crisis, with the majority of positions axed in Germany. The company it will cut up to 700 jobs at its headquarters in the western German city of Ludwigshafen, where it plans to shut down several energy intensive production lines such as ammonia and associated fertiliser production, 鈥渢o reflect the changed framework conditions鈥�. Production will be moved to Belgium, the U.S. and Asia, BASF said. Company CEO Martin Bruderm眉ller said the company was 鈥渧ery confident鈥� most employees made redundant in production could find jobs in other branches of the company but warned that the company will remain under pressure to stay profitable also in 2023.
Due to skyrocketing production prices as a result of the energy crisis, the company 鈥� one of Germany鈥檚 biggest individual gas consumers 鈥� announced last year that it would seek to cut costs of 500 million euros annually by 2024. BASF faced additional energy costs of 3.2 billion euros in 2022, of which 84 percent was accrued in Europe. CEO Bruderm眉ller said both higher energy costs and 鈥渙verregulation鈥� were becoming a burden for the region. The production facility closures will lead to a 鈥渟ignificant reduction in the power and natural gas demand at the Ludwigshafen site,鈥� BASF said, adding that this will reduce the company鈥檚 global CO2 emissions by about four percent (0.9 million metric tonnes) per year. Bruderm眉ller said the company would seek to 鈥渄evelop Ludwigshafen into the leading low-emission chemical production site in Europe鈥� by making use of heat pumps, renewable power installations and hydrogen.
BASF is the owner of gas producer Wintershall DEA, which incurred heavy losses due to its involvement in the now defunct Nord Stream 2 pipeline that was planned to connect Germany with Russia. The highly controversial project was suspended shortly before its completion due to Russia鈥檚 invasion of Ukraine and Wintershall DEA had to write off large parts of its business activities in Russia.
