Tata Steel announced on Friday that it will be closing its two blast furnaces in the UK Plant by the end of this year as a part of its restructuring plan, according to a news agency Reuters report. This step by the company will result in up to 2,800 employees losing their jobs at their Wales steelworks plant. These closing of the plants are part of Tata Steel’s plan to turn around its loss-making UK steelmaking business by switching to lower carbon electric arc furnaces.
This step of the company is backed by a proposal of 500 million pounds by the British government. Tata Steel said that about 2,500 roles were likely to be impacted in the next 18 months, with 2,800 jobs affected overall, and the company would try to maximise voluntary redundancies. This decision from the company came after it reported a net loss of Rs 6,511 crore in the September quarter, with income down to Rs 55,910 crore.
“The course we are putting forward is difficult, but we believe it is the right one,” Reuters quoted Tata Steel Chief Executive T V Narendran saying. “We must transform at pace to build a sustainable business in the UK for the long-term.”
More than 8,000 people work for Tata Steel in the UK, but the warning that as many as 3,000 of those jobs are expected to be affected came in September when the government also announced a funding package to help safeguard 5,000 jobs. Compared to blast furnaces, fewer people operate electric arc furnaces.
By the middle of 2024, the first blast furnace at Port Talbot is anticipated to close, and by the end of the year, the entire process will be phased out. In an effort to minimise employment losses, unions suggested operating one blast furnace while the electric one was being constructed; however, Tata Steel rejected this idea.
The town of Port Talbot, which has about 35,000 residents and has been economically dependent on the steel industry since the early 1900s, will be severely impacted by this closure of Tata Steel.