The challenges

Reduce costs! Voestalpine tightens its belt

Voestalpine CEO Herbert Eibensteiner

(Bild: REUTERS, Sepp Pail, Krone KREATIV)

After three quarters of the 2023/24 business year, revenue fell to EUR 12.4 billion and profit after tax dropped to EUR 431 million - all this and the difficult economic situation are now causing Voestalpine to cut costs. An existing package to reduce costs has been tightened up.

"Above all, the weak economic development in Europe put pressure on Voestalpine's results," says CEO Herbert Eibensteiner. We are now responding to this: "We have an ongoing program in which we are trying to save around EUR 300 million in costs at Voestalpine every year. And we have added to that," says the manager.

Unfortunately, Austria is not using the leeway created by the EU to offset indirect CO2 costs in the energy sector. This has already been implemented in 14 countries, in Germany this electricity price compensation has even been extended until 2030, but in Austria the Electricity Cost Compensation Act was only implemented for 2023 and was then no longer extended. This is a clear competitive disadvantage.

Herbert Eibensteiner, Vorstandschef der Voestalpine

"The expected economic downturn was clearly noticeable in the first nine months of the current financial year," says Eibensteiner, describing the situation that is also challenging Voestalpine. Although the steel group, which operates out of Linz, is broadly positioned and can therefore cushion a great deal, the company still has to react to the drop in demand in some areas and the enormous cost increases.

Less overtime, short-time working
The company is responding accordingly to the different workloads in the individual plants. Eibensteiner talks about reducing the number of temporary workers, less overtime, a reduction in staff at Buderus in Germany and short-time working in individual areas in Germany. "We are launching savings programs throughout Europe and merging divisions. This is how we are adapting to this difficult economic environment."

900 fewer temporary workers employed worldwide since April
There are no major changes in terms of staffing levels at the locations in Linz and Styria. "Although we are of course taking cost-cutting measures here and there. For example, we will be taking on fewer employees," says Eibensteiner. Since April 2023, Voestalpine has reduced the number of temporary employees worldwide by 900.