Chemical giant to fire 2,600 employees after losing 4.8 billion euros!

German chemical giant BASF said Monday it will cut 2,600 jobs, of which about 65% will be in Germany. At the same time, BASF will also close several plants, including two ammonia plants and related fertilizer facilities. The company also ended its share buyback program early because of the worsening global economy. Basf said earnings continued to fall because of high costs in Europe, uncertainty stemming from the Russia-Ukraine conflict and rising interest rates. Martin Brudermueller, chief executive of BASF, said in a statement: "Europe's competitiveness is increasingly being affected by over-regulation, slow approval processes and bureaucracy, in particular the high cost of most production inputs. High energy prices are now placing an additional burden on Europe's profitability and competitiveness. '

Earnings are under pressure and job cuts are expected

On February 24, BASF announced its 2022 fourth quarter and 2022 full year results. Fourth-quarter sales were 19.32 billion euros and the net loss was 4.8 billion euros. Full-year sales were 87.3 billion euros, up 11.1 percent from a year earlier. Net loss for the year was €627m. One of the main reasons for the decline was the write-down of assets at Wintershall Dea, an oil and gas company in which BASF has a stake, due to the cancellation of the merger of its exploration and production activities in Russia and the de facto nationalisation of its stake. Back in October 2022, BASF set out plans to reduce annual costs in Europe by 500 million euros.

Basf said earnings would continue to fall, with earnings before interest and tax (EBIT) adjusted for exceptional items expected to fall to between €4.8bn and €5.4bn in 2023.