Negotiating the (Future) Layoff Landscape: BASF Ups the Savings Game, Sparing the Booze Cellar and Social Clubs
Headquarters savings for BASF, but expenses at the winery remain untouched
Welcome to the earnings-lean era of the globe's largest chemical empire, BASF. This heavyweight is on a mission, aiming to slash over a billion euros from its headquarters expenses by next year's end. And they're nearly halfway there already! But don't fret, there are some budgetary items BASF just can't bring themselves to shave.
Katja Scharpwinkel of the BASF board is the mastermind behind the cost-cutting operation in Ludwigshafen, the company's headquarters. Since the start of the Ukrainian war and the end of cheap Russian gas, BASF has been racking up losses at this location. To steer the ship back to solid grounds, Scharpwinkel has set her sights on those costs that are within the company's control – facility closures, internal reorganization, and job reductions.
Over 2,500 jobs have already bitten the dust since 2023, but thanks to a location agreement, no more dismissals due to operational reasons are on the horizon until 2025. The current negotiations with employee representatives revolve around a fresh location agreement, but Scharpwinkel wasn't willing to disclose any specifics regarding additional job cuts or closed facilities.
Fear not, though, about losing some of the more traditional perks of working at BASF. Mainstays like the company's own wine cellar and the BASF after-work club, where employees can let loose with concerts and galas, are not up for grabs.
On the partnership front, BASF had some recent good news. The corporation has set its sights on taking over DOMO Chemicals' 49% share in the Alsachimie joint venture, where BASF currently holds 51%. The deal, pending talks, is anticipated to close mid-2025. Once again, this move doesn't directly involve job cuts at the headquarters.
In essence, while BASF is in a state of transition and implementing massive changes in response to economic pressures, these alterations primarily focus on energy savings and operational improvements rather than a new location agreement. As for the wine cellar and after-work club? They're off the chopping block!
In the cost-cutting efforts spearheaded by Katja Scharpwinkel, the focus lies on reducing facility costs, internal reorganization, and job reductions at BASF, while vocational training and the community policy continue to be prioritized, ensuring the workforce remains skilled for industry needs and stays engaged in business initiatives. The pending takeover of DOMO Chemicals' 49% share in the Alsachimie joint venture, which does not involve job cuts at the headquarters, further showcases BASF's strategic approach in affecting change within the organization.
