Mumbai, Sep 2 (IANS) Tata Steel on Monday said that it will lay off over 400 employees in Britain amid "considerable challenges" in the European steel industry.
This comes as two biggest European economies -- Britain and Germany -- are already on the brink of a recession, witnessing negative growth rate.
In a regulatory filing, the company said it is "unable to find a way forward" for Orb Electrical Steels and so proposes to close the site, with the potential loss of up to 380 jobs.
In addition, Tata Steel informed that it has been unable to find a buyer for Wolverhampton Engineering Steels Service Centre, in Britain, and proposes to close it, potentially affecting up to 26 jobs, including a sales office in Bolton.
"We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks. However, today's proposal will be sad news for colleagues at Orb in South Wales. This is necessary, enabling us to focus our resources..," said Henrik Adam, CEO of Tata Steel's European operations.
Tata Steel said that the Orb Electrical Steels business has been loss-making for several years as it struggled to compete in the fast-moving market to supply steels used in electricity transformers in which customer requirements have out-stripped the site's capability.
"Converting the site to create steels for future electric vehicle production would cost in excess of 50 million pounds in a highly competitive market where Tata Steel faces higher-volume competitors both in Europe and globally," the company said in a statement.
Henrik added: "Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges. We saw no prospects of returning the Orb business to profitability in the coming years."
The company said "every effort will be made by Tata Steel to mitigate the impact on affected employees including offering alternative employment opportunities where possible at other Tata Steel sites".
"Consultations with affected employees and trade unions at both Orb and Wolverhampton will commence shortly. This process will include assessing ways to minimise the need for compulsory redundancies," the company added.
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