Evonik is to cut up to 2,000 jobs worldwide by the end of 2026 in an effort to make annual cost savings of €400m ($435m).
The job cuts come after Evonik posted a 2023 net loss of €465m as sales fell by 17% to €15.3 billion.
The German chemicals giant said the redundancies would include a “disproportionate” number of management positions.
The majority of these lay-offs, around 1,500 jobs, will be made in Germany.
“What we are currently experiencing are not cyclical fluctuations, but massive, consequential changes of our economic environment,” said Evonik executive board chairman Christian Kullmann.
“We are addressing this challenge with the 'Evonik Tailor Made' programme, which will change our organizational structure for good,” he added.
Evonik aims to significantly reduce all administrative activities that do not directly support its operating businesses.
At the same time, key tasks will be bundled in its new organizational structure.
The number of hierarchical levels below its executive board will be reduced to a maximum of six, while review and approval procedures will be significantly accelerated.
Group-wide, managers will then lead a median of seven direct reports, compared to the current span of control of one to four.
Around 80% of the annual €400m savings expected by the end of 2026 will be personnel reductions, the rest will come from lower non-personnel costs.
“We have chosen our own, tailor-made path for Evonik without external consultants to achieve the best possible results,” said chief human resources officer Thomas Wessel.
“It is clear that our company will look very different in two years ─ much more dynamic and efficient. We will achieve this in the fair manner Evonik is known for: focused on joint goals and respectful in our dealings with each other,” he added.
