Germany's ThyssenKrupp to shed more than 3,000 jobs

ThyssenKrupp plans to shed more than 3,000 jobs, a press report said yesterday, the first time a German industrial group would slash permanent posts as a result of the country's recession.

ThyssenKrupp, a steel maker and manufacturer of industrial goods, would cut 1.5 per cent of its workforce as it struggles with falling demand for its products, the Financial Times said, without identifying its sources.

A spokesman for the group told AFP "it was not serious at the moment to speculate about figures". "It is true that we much cut costs, and we have said we cannot rule out personnel adjustments," the spokesman added.

According to the Financial Times, ThyssenKrupp's steel, automotive and ship building divisions would be affected by cuts meant to counter heavy global slumps in those sectors.

The group's supervisory board was to approve the plan at an extraordinary meeting next Friday.

Until now, German groups have reduced workers' hours or eliminated temporary posts in an attempt to weather the country's worst recession since the 1930s.

In the high-tech sector however, professional software giant SAP announced in late January that it too would cut more than 3,000 jobs, the first such layoffs in its history.

ThyssenKrupp said on Thursday that the group would be reorganised, with its five divisions reduced to two.

A "few hundred" administrative posts would be eliminated, the spokesman told AFP, but cuts in the production workforce would be the result of "a process underway with personnel representatives."

In January, the heads of 30 leading German companies told Chancellor Angela Merkel they would not resort to compulsory layoffs, the report noted.

But Germany's export-oriented economy has been slammed by the global slowdown and is forecast to contract sharply this year.

On Thursday, the Ifo economic institute estimated that Europe's biggest economy could shrink by more than four per cent, much more than the government's current official forecast of a 2.25 per cent contraction.

The Financial Times Deutschland cited government internal calculations that suggested the contraction could be as much as five percent this year.