Situation is assessed

Cost-cutting package at Lenzing: Uncertainty about job cuts

Demand for fashion was weak in Europe in the first half of the year. This was triggered by the rather cold weather and inflation.

(Bild: stock.adobe.com)

Although Lenzing remained in the red at the end of the first half of the year, the CEO says: "We are heading in the right direction." The fiber producer is already ahead of schedule with the savings package it has put together. How many jobs will be cut remains to be seen. The new Chief Transformation Officer says that there will only be clarity on this in September.

At EUR 1.31 billion, revenue at Lenzing AG in the first half of 2024 was higher than in the first half of 2023. While the operating result before depreciation and amortization climbed to EUR 164.4 million, the fiber producer posted a result after tax of minus EUR 65.4 million and before tax of minus EUR 22.3 million.

The aim is to become leaner. The aim is to save 100 million euros per year, of which 30 million euros is accounted for by personnel costs.

Walter Bickel, Chief-Transformation-Officer Lenzing AG

Bild: Bickel & Company

"We are heading in the right direction, even if the relevant markets have not yet recovered," emphasizes CEO Stephan Sielaff, who will be replaced by Rohit Aggarwal in the coming months and will then leave the company in March 2025.

Better prices for caustic soda
The view of the cost optimization program is positive: "We are well above plan here." Walter Bickel, Chief Transformation Officer, has been driving the implementation of the savings package since mid-April. Better prices for caustic soda are to be achieved, for example, and the costs for heavy fuel oil at the plant in Brazil have been reduced by five million euros per year, says Bickel.

"Still able to say where we have which cuts"
Jobs are also being reduced, which is called leaner structures. "We are not yet in a position to say where we have made which cuts. The exact figures are currently being worked out, but Austria will be affected," says the CEO, who announces: "There will be clarity in September." In mid-March, Sielaff announced that a total of 80 jobs would be lost in Lenzing and Heiligenkreuz.