Reorganization plan announced by chemical corporation
Evonik Shakes Things Up: A Major Restructuring Ahead
chemical conglomerate Evonik is embarking on an extensive reorganization to remodel its chemical group, making it more streamlined and agile. With a focus on shedding 7,000 out of its 32,000 jobs, the company is eyeing a more slender and efficient future.
Of these 7,000 positions, 2,000 jobs, including 1,500 in Germany, have been earmarked for the chopping block, as announced in the spring. Additionally, infrastructure operations employing 3,600 people are set to be spun off or fully divested. It's important to note that Evonik has ruled out compulsory layoffs until 2032.
Beyond the ongoing "Evonik Tailor Made" streamlining program, the core restructuring involves a comprehensive divisional overhaul. At the moment, Evonik is organized into 14 business units, clustered into four divisions. But come April 1, Evonik will be streamlined into just two: Custom Solutions and Advanced Technologies.
Custom Solutions will focus on niche markets, providing customer-centric, high-margin products. On the other hand, the Advanced Technologies segment will concentrate on operational excellence in sectors such as high-performance polymers and hydrogen peroxide production. Each division is projected to bring in around 6 billion euros in revenue.
The businesses under Advanced Technologies will primarily aim at generating cash flow, which will be reinvested into growth segments. To this end, Evonik plans to concentrate its future acquisitions on Custom Solutions. Despite the split, Evonik's CEO Kullmann has stressed that both segments are equally essential in creating sustainable value for the company.
Evonik is moving away from the "specialty chemicals" label and is mulling over a new label to better differentiate itself. The company began implementing the "Evonik Tailor Made" program, which aims to streamline the organization, reduce bureaucracy, and make Evonik a more efficient entity. Of the 2,000 jobs to be eliminated by the end of 2026, 500 will be leadership roles, and 1,000 managerial positions will be converted into specialist roles. The number of organizational units will shrink from the current 8,600 to fewer than 5,600.
Apart from this reorganization, Evonik's leadership is undergoing changes, with the division management level being eliminated entirely. The company is also evaluating the future of its service units at the Marl and Wesseling sites, which employ approximately 3,600 staff. Options on the table include retaining the units, forming joint ventures, or selling them to investors or chemical park operators.
In a nutshell, Evonik's restructuring is set to make it leaner, meaner, and primed for sustainability amidst global economic uncertainties. The company is putting acquisitions on hold for two years to focus on internal growth, restructuring, and cost efficiency. This ambitious transformation aims to fortify Evonik's resilience and boost its long-term growth prospects.
The chemical conglomerate Evonik is set to streamline its business operations, with a focus on areas such as finance and industry, as it restructures to become a leaner and more efficient entity. The company's reorganization includes the shedding of 7,000 jobs and the selling off or spin-off of infrastructure operations employing 3,600 people.
With the upcoming restructuring, Evonik will be transformed into two distinct business segments – Custom Solutions and Advanced Technologies – each with a unique focus. While Custom Solutions will concentrate on niche markets and high-margin products, Advanced Technologies will aim at generating cash flow for reinvestment into growth segments.
