MUNICH—Wacker Chemie A.G. plans to slash more than 1,000 jobs—mostly at German facilities—by the end of 2022 as part of "Shape the Future," a company program that aims to save Wacker about $270 million a year.
The Feb. 20 announcement comes less than a month after the chemical company reported a loss of $705 million in its preliminary figures for 2019.
Revenue fell about 1 percent to $5.52 billion last year, partly due to lower prices for solar-grade polysilicon and standard silicones.
"Global competition, trade restrictions, and global economic and political risks create ongoing uncertainties," said David Wilhoit, Wacker's president and CEO of the North and Central Americas Region.
Wacker said it supplies "the right technologies to the right markets" to support global trends, such as sustainability, renewable energy, digitalization and urbanization, Wilhoit added. However, he said, the company's structure needs to be leaner.
"Through 'Shape the Future,' Wacker will holistically become a leaner, more efficient company to weatherproof our earnings to face these challenges," he said.
Wacker officials plan to reduce material costs, in-house services and its work force. The pending job cuts will affect administrative departments and the indirect, non-operational functions of Wacker's business divisions. More than 80 percent of the reductions will be made at German facilities, which employ about 10,000 of Wacker's 14,500 employees.
Wacker officials said they will work with employee representatives to reduce the work force in a socially responsible manner through retirement, semi-retirement and severance agreements. If the measures are successful, the company can avoid compulsory layoffs.
"The goal is to globally realign the organizational structure with customer requirements," Wilhoit said. "The focus of the efficiency program is on German sites where more than 80 percent of the reductions will take place. How this would affect the approximately 4,500 employees outside of Germany has not been determined."
Wacker is early in the process of streamlining global operations.
"Many alternatives are being looked at to save costs in all regions as a long-term approach," Wilhoit added.
Wacker has 24 production sites around the world, including six in the U.S., as well as research and development sites and administrative offices.
"We are preparing for a harsher competitive environment—both in our polysilicon business and at our chemical divisions," said CEO Rudolf Staudigl. "Shape the Future is a comprehensive approach. Our aim is not only to achieve significant cost savings, but also to decisively strengthen Wacker for tomorrow's challenges and secure a long-term competitive edge."
The first outline of the restructuring plan has been presented to employees and is up for discussion and evaluation, according to Christian Hartel, an executive board member.
"We will continue to work closely on this with employee representatives and enter into constructive negotiations promptly," Hartel said. "We are confident of finding good and fair solutions to achieve our objectives."