German industrial giant ThyssenKrupp Steel Europe on Monday announced a plan to shrink its workforce from the current 27,000 to 16,000 within six years.

The Duisburg-based company blamed an increase in cheap imports, especially from Asia, for putting an increased and "significant strain on competitiveness."

Thyssenkrupp to reduce production capactiy

"Urgent measures are required to improve Thyssenkrupp Steel's own productivity and operational efficiency and to achieve a competitive cost level," a statement from the firm said.

Some 5,000 jobs in its European steel operations would be cut by the end of 2030 through "adjustments in production and administration," it announced.

A further 6,000 jobs are to be outsourced or stripped away in business sales, according to the plan.

To address overcapacity in the market, the company plans to reduce production capacity from the current 11.5 million metric tons to a future target level of 8.7 to 9 million tons.

Union calls job cuts 'catastrophe'

Thyssenkrupp's head of steel, Dennis Grimm, said the restructuring was aimed at securing long-term job prospects for as many employees as possible.

"Comprehensive optimization and streamlining of our production network and processes is necessary to make us fit for the future," he said.

"We are aware that this path will demand a great deal from many people, especially because we will have to cut a large number of jobs over the coming years in order to become more competitive."

The steelmaker said it hoped to avoid lay-offs, and would instead aim to reduce staff through voluntary departures.

However, trade union IG Metall, which represents much of the workforce, described the plan as "a catastrophe" for employees.

IG Metall is at the same time in negotiations with German carmaker Volkswagen following the announcement that it also plans to cut thousands of jobs in Germany.

Plan to spin off steel operations

Alongside the cost-cutting measures, parent company and majority shareholder ThyssenKrupp wants to push ahead with a plan to transform its steel division into a fully independent company. That proposal has met with opposition from labor leaders.

Czech energy company EPCG currently holds a 20% stake in ThyssenKrupp Steel, with plans to increase its holding to 50%.

ThyssenKrupp, whose products range from steel to submarines, recorded a loss of €1.5 billion ($1.6 billion) for the 2023-24 financial year, having lost some €2 billion the previous year.