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Cologne - Lanxess, the German maker of speciality chemicals, unveiled plans on Wednesday to axe 1 000 jobs by the end of 2015 in response to falling demand for its products.
"Due to the current situation we must now take action," said Lanxess chief executive Axel Heitmann, revealing a programme to save €100m per year by cutting costs and jobs.
The company employs 17 500 people worldwide.
It was primarily the group's synthetic rubber activities that were experiencing a temporary weakness in demand, increased competition in the market and volatile raw materials prices, Heitmann said.
"Lanxess is countering the challenging business environment with a comprehensive efficiency programme...(to) reduce costs and headcount, as well as optimise its portfolio."
The positions would be phased out through a voluntary separation programme, which includes early retirement packages and severance pay.
In addition, the variable compensation for the current business year will be reduced for those who are eligible. This includes the management board.
All measures were being coordinated with employee representatives, Lanxess said.
Heitmann told a news conference that around 300 jobs would be on the line in Germany, but gave no further indication where the other cuts would fall.
Among Lanxess' biggest customers is the automobile and tyre sector, accounting for 40% of the group's annual sales.
The two sectors "will remain challenging for us in 2013, particularly in Europe," Heitmann said.
"We cannot ignore this temporary weakness in demand in Europe. We'll respond to it," he said.
With regard to the planned shake-out of its portfolio, Heitmann said Lanxess was examining its "strategic options", ranging from cooperation to joint ventures and possibly even a sale of certain activities.
