Innovations and cuts: BASF is planning drastic job cuts!

Innovations and cuts: BASF is planning drastic job cuts!

The chemical company BASF has undergone significant changes in recent months that are affecting many in the region. Over 800 jobs have already been cut at the Ludwigshafen headquarters in 2024, and CEO Markus Kamieth emphasizes that this is just the beginning of a comprehensive transformation. The challenges are enormous: high energy costs, dwindling demand and increasing import pressure are causing problems for the world's largest chemical company, which recently reported sales of 65.3 billion euros. The situation in Ludwigshafen is particularly tense, as the main plant has been in the red for years, as Merkur reports.

In order to strengthen the location, BASF has launched an extensive savings program that aims to achieve annual savings of 2.1 billion euros by 2026. So far, around one billion euros have already been saved. “We’ve only just started,” says Kamieth. The first stages of the workforce reduction are expected to include around 1,800 jobs, although exact figures for further steps have not yet been communicated. In addition, the group plans to only operate economically viable plants in the future and to close several locations in Ludwigshafen.

Restructuring and future prospects

BASF is not only facing challenges in Ludwigshafen. The chemical industry in Europe is generally suffering from falling production, while demand in China is rising again due to the move away from the zero-Covid policy. Despite the difficulties in Germany, BASF is sticking to investments in China, which at 10 billion euros will be the largest by a German company there. This strategic decision aims to strengthen customer proximity, as [Tagesschau](https://www.tagesschau.de/wirtschaft/unternehmen/basf-stellenwandel-chemieindustrie- Investitionen-101.html) notes.

Financial indicators are mixed. Operating profit for 2024 rose slightly to 7.9 billion euros, but fell short of expectations. At the same time, earnings suffered from depreciation in battery materials and falling precious metal prices. For the coming year, an EBITDA of 8.0 to 8.4 billion euros is forecast, and the free cash flow forecast is 0.4 to 0.8 billion euros. A dividend of 2.25 euros per share is promised for shareholders, which promises at least 12 billion euros in distributions by 2028 [Ludwigshafen24].

The outlook for the next few years

Massive job cuts are expected in Ludwigshafen, which could affect up to 4,200 jobs, resulting in a net decline of around 2,600 jobs. The savings should be offset primarily through natural fluctuation and transfers. The works council and employees are under great pressure, while at the same time the closure of several production facilities in Ludwigshafen is planned in order to significantly reduce CO2 emissions. With the goal of establishing Ludwigshafen as a “net-zero emissions location” by 2045, BASF is trying to reposition itself not only ecologically but also economically.

The coming months and years will be decisive in determining whether BASF can turn things around. It remains to be seen whether the savings concepts will bear fruit and the Ludwigshafen location will get back on the road to success. But one thing is clear: the transformation has begun, and it affects not only the employees, but also the entire region.