2,000 jobs to be cut

Competition from Asia: Lenzing Symbolizes the Crisis

The main plant of the fiber manufacturer Lenzing is located in the town of the same name in Upper Austria.(Bild: Wolfgang Spitzbart)

The Upper Austrian fiber manufacturer Lenzing is responding to increasing competition from Asia with a drastic cost-cutting program. The leading company thus epitomizes the problems facing domestic industry.

Shock in the domestic industry: As reported, the Upper Austrian fiber manufacturer Lenzing plans to cut approximately 2,000 jobs by the end of 2027. 1,400 jobs will be lost due to the sale of the plant in Indonesia. In administrative roles, particularly at the headquarters in Upper Austria, 340 employees will be let go. These cuts are part of a job reduction plan that was already announced last fall. And hundreds more jobs are affected by the closures of the plants in Heiligenkreuz, Burgenland, by the end of the year (285 employees) and in Grimsby, England (230), by the end of 2027.

In Heiligenkreuz, jobs are expected to be saved through the sale of the plant to a new owner. The state of Burgenland is open to taking a stake should no investor be found.

“Overcapacity is putting pressure on prices”
In any case, Lenzing’s drastic job cuts are symptomatic of the problems facing Austria’s industrial sector. Although the global cellulose fiber market is growing steadily—with estimates continuing to project at least 4 percent annual growth—Lenzing can no longer keep pace with Asian producers. “Our competitors from Asia are large and have built up massive capacities. This overcapacity is putting downward pressure on prices,” says CEO Georg Kasperkovitz. Added to this are management mistakes such as the investment in Indonesia.

Our competitors from Asia are large and have built up massive capacity. This excess capacity is driving down prices.

Georg Kasperkovitz, CEO der Lenzing AG

Bild: Neumayr Fotografie - Christian L

“More nonwovens, fewer textiles”
That’s why the publicly traded industry leader is now adopting a new strategy: “More nonwovens and fewer textiles,” Kasperkovitz summarizes. Sales of textile fibers are subject to significant fluctuations—the company wants to become less dependent on them and expand its nonwoven production. Kasperkovitz also plans to invest in innovations such as a new generation of fibers.

Already the third cost-cutting program
At the same time, Lenzing is downsizing overall. Following the planned plant sales, only six of the current nine locations will remain. The company is tightening its belt with a 120-million-euro cost-cutting program—already the third since 2022. The fiber manufacturer has been posting losses continuously since then. Last year, the loss amounted to 135 million euros. This crisis has long been felt on the stock market as well: The stock has lost more than three-quarters of its value since 2022. On Tuesday morning alone, the share price temporarily plummeted by 17 percent.