On July 27, the Austrian fiber manufacturer Lenzing Group announced a global operational restructuring, planning to reduce its workforce by approximately 2,000 employees by the end of 2027. The company’s total full‑time headcount, which stood at about 7,700 at the end of 2025, will be significantly reduced.
The Lenzing plant in Heiligenkreuz will cease production by the end of 2026, and the Grimsby plant will close by the end of 2027. Together, the two facilities have an annual capacity of about 135,000 tons of lyocell fiber, with Heiligenkreuz contributing roughly 90,000 tons and Grimsby around 45,000 tons. The two sites currently employ about 515 people. In addition, the viscose fiber plant in Indonesia, PT South Pacific Viscose, which has an annual capacity of over 320,000 tons and is Lenzing’s largest viscose production base globally, is also being prepared for sale.
Lenzing’s CEO, Georg Casperkovitz, acknowledged that closing the plants was a “difficult but necessary decision.” The primary reason is the loss of competitiveness due to high energy and labor costs in Europe. With Austrian labor costs at about €44.5 per hour, well above the EU average, electricity prices around €90 per megawatt‑hour, and continuing increases in natural gas prices, Austrian manufacturing finds itself at a disadvantage within Europe. Over the past five years, European products have steadily lost competitiveness relative to those from Asia, and the Heiligenkreuz and Grimsby plants “are no longer profitable.”
Lenzing has named its transformation strategy “Grow Nonwovens, Reset Textiles.” The company will cease production of standard viscose fibers and other bulk textile products, refocusing its textile fiber portfolio on premium market segments. The nonwovens business has been identified as the core driver for future growth. Lenzing has committed to investing €23 million to expand nonwovens capacity at its Austrian plant and will upgrade its Mobile, Alabama facility in the United States into a specialty nonwovens production base. In the future, the company also plans to increase capacity for TENCEL™ and Modal fibers in China and Austria. Production of high‑end fibers will gradually shift to core manufacturing sites such as Lenzing’s headquarters in Austria, Thailand, Nanjing, and Mobile, USA.
To support the restructuring, Lenzing plans to raise up to €300 million through a rights issue and has signed new financing agreements of up to €300 million, while extending existing debt maturities to 2030. Major shareholders, including B&C Group, Brazilian pulp giant Suzano, and Oberbank, have indicated their participation in the capital increase in proportion to their holdings. The restructuring is expected to result in non‑cash asset impairments of up to €150 million and restructuring provisions of up to €40 million related to job cuts. The company has also launched a “Performance Enhancement Program” aimed at achieving cost savings of €120 million by the end of 2027.
In the second quarter of 2026, Lenzing reported revenue of €652 million, EBITDA of €123 million, and an EBITDA margin of 19%.
