Tata Steel to Cut 500 U.K. Jobs as Battles Weak European Demand

Tata Steel Ltd. (TATA) will cut 500 mainly management and administrative jobs in the U.K. to lower costs as it struggles with weak demand from the construction industry.

Jobs will go in Scunthorpe, Teesside and Workington, the company said today in a statement. Cuts will “predominately” affect management and administration, it said.

“European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years,” Karl Koehler, chief executive officer of Tata’s European operations, said in the statement.

Steelmakers are shuttering plants and cutting jobs because of excess capacity in Western Europe. ArcelorMittal (MT), the biggest producer, has closed sites at Liege in Belgium and Florange in France and says it’s considering halting plants in Eastern Europe as it battles falling demand.

Tata, which bought Corus Group in 2007 for about $6.2 billion pounds ($10 billion), has been shuttering sites and cutting jobs in the U.K. since the global financial crisis.

“Today’s news once again reflects the fragile state of our economy and the lack of any real impetus by government to support our manufacturing base,” Michael Leahy, the general secretary of labor union Community and chairman of the U.K. Steel unions’ committee, said in the statement.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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