Evonik announces comprehensive restructuring and plans to cut 3,200 jobs to address escalating cost pressures

Facing mounting global economic pressures, specialty chemicals giant Evonik Industries has announced that it will implement far-reaching structural reforms and cost-cutting measures over the coming years to accelerate its corporate transformation.

Evonik CEO Christian Kullmann said: “The global political situation remains highly uncertain, economic growth continues to be weak, and international competition is becoming increasingly intense. We must become stronger in this environment. Our fate is in our own hands, and we are determined to seize the opportunities that belong to us.”

1. Launch a new round of global layoffs and advance cost reduction and efficiency improvement through multiple measures.

The extensive restructuring and layoff plan has been jointly approved by the Executive Board of Evonik and employee representatives, and will affect all global business and administrative units.

Evonik plans to eliminate a total of 3,200 positions worldwide, including 2,150 in Germany. This round of layoffs is scheduled to be carried out between 2027 and the end of 2029.

Core drivers: As part of its broader “Evonik Tailor Made” initiative, the job reductions will be driven primarily by efficiency gains, digital transformation, business outsourcing, and potential offshoring of operations.

Ongoing workforce reduction in the earlier phase: Prior to this, Evonik had already been implementing an existing efficiency enhancement initiative, which calls for the elimination of 2,800 positions between October 2023 and the end of 2026.

Ensuring social acceptability: Thomas Wessel, Chief Human Resources Officer and Labor Director of Evonik, emphasized that future layoffs will continue to maintain "social acceptability" (i.e., be carried out in a moderate manner), with specific details to be finalized with social partners (such as labor unions) in the coming weeks.

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II. Divest long-term loss-making businesses and fully shut down the global polyester sector by 2027.

In addition to reducing headcount, Evonik is also making deeper strategic adjustments to its business portfolio, deciding to completely exit businesses that lack competitiveness.

Shutdown of Global Polyester Business: In its customized solutions business segment, Evonik announced that it will close its global polyester business by 2027.

Affecting three major production sites in China and Germany: This move will directly lead to the closure of related plants and sites at Evonik’s Witten and Marl sites in Germany, as well as its Shanghai site in China. The Witten site will be completely shut down in 2027.

3. Facing fierce global competition and structural disadvantages in Europe, core factories are at risk of complete closure.

Lauren Kjeldsen, a member of Evonik’s Executive Board responsible for the business segment, said candidly: “Exiting the polyester business and shutting down the related production is an economically unavoidable step. Global competitive pressure, structural disadvantages in Europe, and increasingly deteriorating market dynamics mean that all alternatives we evaluated are not economically viable for Evonik in the long term.”

The burden of chronic losses: although the polyester division can still generate annual revenue of about 150 million euros each year, it has in fact been operating at a loss for many years.

Precise Business Layoff Distribution: The complete shutdown of the polyester business will additionally result in the direct elimination of certain positions, including 266 positions at the Witten site, 45 positions at the Marl site, and 35 positions at the Shanghai site. The divestment of this business marks Evonik's adoption of a more aggressive "cutting off the arm to save the body" strategy in the face of high local production costs in Europe, in order to ensure the group's long-term profitability.