As part of the ongoing programme to cut costs, LKAB announced the decision made in February that the company will reduce its workforce by 400 positions. Initially, redundancies will be realized through natural attrition and by reducing the number of temporary employees. Following a review of operations it is now apparent that redundancies will be necessary.
Approximately equal numbers of blue-collar and white-collar employees are affected by the staff cuts. Among blue-collar workers, most of the redundancies can be made by terminating temporary employment. Preparations are being made to terminate about 100 white-collar positions.
“Since the price of iron ore continues to fall, we must reduce our costs at a faster rate. It is now apparent that a reduction of 400 positions cannot be realized through natural attrition. Unfortunately, redundancies may be necessary to be able to ensure LKAB's long-term competitiveness and profitability,” said Frank Hojem, Senior Vice President, Communications, LKAB.
Major investments, projects and legislation have meant that LKAB has increased its hiring of white-collar employees in recent years. Since the company has decided to mothball operations that are not critical for meeting production targets, some white-collar redundancies have been identified. It is hoped that the number of redundancies can be reduced via severance solutions such as early retirement. Otherwise, jobs may have to be terminated.
“Today, we notified the labour unions and negotiations will begin in early May. We inform staff on an ongoing basis,” said Grete Solvang Stoltz, Senior Vice President, Human Resources, LKAB.
The falling price of iron ore has caused LKAB to revise the schedule for personnel reductions. The personnel reductions must be realized before the end of the first quarter of 2016. The personnel reductions are part of a larger programme of cost reductions of which the aim is to secure LKAB's long-term competitiveness on a changing market.
More information: Frank Hojem, Senior Vice President, Communications at LKAB.
Telephone: +46 (0)920-380 70