With 3,900 staff registered as employed locally in 2019, the cuts concern around 15% of its Luxembourg workforce.

Country head Roland Bastian explained in a press statement the job cuts formed part of cost-saving measures “in order to ensure the long-term future of our organization.”

“Different segments will be affected to different extents and we will review and discuss this in detail in the consultation sessions which are foreseen with our social partners,” he said.

Luxembourg economy minister Franz Fayot, LSAP, called the announcement a “dark moment in the country’s steel history.” He said:

“I am thinking above all of the employees who find themselves in a difficult situation and who, together with their families, are living in uncertainty. I insist that the reduction of the workforce be carried out in the most social way possible, if necessary by using the existing instruments within the framework of the policy of maintaining employment.”

The firm was already facing tough market conditions before the pandemic, as a result of steel imports to Europe, the cost of the emissions trading system and increasing raw material prices, among other factors. According to figures published in June, ArcelorMittal estimated the EU’s decarbonization plans would cost it between €45 and €65bn.

In 2019, it recorded a gross debt of $14.3bn and net debt of $9.3bn and was looking forward to a year of growth in 2020 until the pandemic struck.

The firm's statement read: “With the coronavirus pandemic, steelmaking has been further affected as a result of the significant drop in activity of its customers. This is especially the case in the two sectors that are the largest consumers of steel, namely the automotive and construction industries.”

Luxembourg’s two main unions responded with disappointment and calls for a new tripartite agreement linked to the restructuring plan. The OGBL said it is not surprised but was nevertheless shocked by the announcement.

“The OGBL, with its majority in the ArcelorMittal delegation as well as at sector level, will ensure that no employee loses his or her job. Under no circumstances may this restructuring be carried out at the expense of employees,” the union said in a statement, calling on ArcelorMittal to exhaust other options such as early retirement, reclassification and partial unemployment and invest in its local activities.

The LCGB also warned against using covid-19 as a way to free the firm from its social and economic obligations.