Page last updated at 18:48 GMT, Sunday, 25 January 2009

Corus set to cut 2,500 jobs in UK

Corus Scunthorpe
Corus, a subsidiary of India's Tata Steel, employs 24,000 people in the UK

Steelmaker Corus is set to cut 3,500 jobs worldwide, including more than 2,500 in the UK, the BBC understands.

Corus said it could not comment on rumour or speculation, but the company, like all steelmakers, is facing an unprecedented downturn in demand.

One union official told the BBC Corus would announce its restructuring plans to workers at 0930 GMT on Monday.

Corus, a subsidiary of India's Tata Steel, employs 24,000 people in the UK and 42,000 worldwide.

According to the Sunday Times, the Anglo-Dutch steelmaker is not planning to close any of its British plants.

Corus's main UK sites are at Port Talbot, Scunthorpe and Teesside. It also has a site in Rotherham.

The company wants to use this semi-idle period - which it expects to last for six months - to retrain its employees
Robert Peston, BBC business editor

Mick Fell, union chairman at Scunthorpe, said he did not anticipate there would be any job losses there, but said he imagined workers would be "quite nervous" ahead of Monday morning's announcement.

A spokesman for Community trade union, which represents steelworkers, said the reported job cut figures may have been "exaggerated".

He went on: "Any job cuts that damage the viability and long-term future of the steel industry will be looked on unfavourably."

He added that the union was committed to defending the jobs and terms and conditions of its members.

'Support workers'

Rotherham MP Denis MacShane said he had spent the weekend urging Corus to maintain the production capacity in Rotherham and South Yorkshire so "once the world slump in demand for steel is over the UK will remain a steel-making economy".

Steelworks at Port Talbot, Scunthorpe and Teesside
Engineering steels produced at Rotherham
Strip mills at Llanwern, South Wales
Tinplate works at Trostre, south Wales
Coating works at Tafarnaubach, south Wales and Shotton, north Wales
Electrical steel works at Newport, south Wales
Tube mills at Corby and Hartlepool
Plate mill at Dalzell, Scotland
Narrow strip mills at Brinsworth, England
Special section mill at Skinningrove, England
Service centre at Lisburn, Northern Ireland

He said: "The government has found billions for the banks and must do what it takes to support steelworkers and their families as we go through this global recession."

"Corus has invested in training a new generation of steel-workers and ways should be found to keep them operational rather than see steel-making disappear from the UK."

A 40% fall in global demand for steel from its peak of last year caused Corus's order book to drop by more than a third.

Steel prices have fallen by half since last September.

The company has already announced swift measures to reduce costs.

"I understand that the cuts at Europe's second-largest steelmaker have been brought forward as a result of the downturn, but it was clear to [its soon-to-retire chief executive] Mr Varin that Corus needed to become more efficient in any case," said Robert Peston.

Steelmakers around the world have been hit by falling demand from carmakers, shipbuilders, construction and heavy engineering sectors, which, in turn, have seen demand for their products drop.

Steelworks at IJmuiden, The Netherlands
Coating works at Maubeuge, north France
Electrical steel works at Surahammer, Sweden
Tube mills at Oosterhout, Arnhem and Maastricht, The Netherlands
Rail mill at Hayange, north-east France
Narrow strip mills at Dusseldorf and Trier, Germany, and Warren and Bethlehem, USA
Service centres at Cork and Dublin, Ireland

Corus was formed in 1999 through the merger of British Steel and Koninklijke Hoogovens. In 2007, it became a subsidiary of Tata Steel.

Corus claims to be Europe's second-largest steelmaker, producing 20m tonnes of crude steel every year.

Its annual revenues are about £12bn ($16.3bn).

The company has requested financial help from the UK government for a rolling programme of providing new skills to its entire workforce.

"This would take the form of a state top-up for the wages of employees," said Robert Peston.

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