ArcelorMittal to sack 20% staff in $1 billion cost-reduction plan

ArcelorMittal, the world's largest steelmaker, plans to cut 20% of its office staff in a $1 billion cost-reduction plan, it said on Thursday after posting higher than expected fourth-quarter earnings and restored dividend payments.

The Luxembourg-based company forecast 4.5-5.5% growth in steel demand this year and also announced that finance chief Aditya Mittal will take over as CEO from his father Lakshmi, who founded the company in 1976 and will become executive chairman.

Fourth-quarter core profit almost doubled to $1.73 billion, against an average forecast of $1.47 billion in a company poll of analysts.

Though the Covid-19 pandemic hammered demand last year, ArcelorMittal said it had benefited from a gradual recovery towards the end of the year, with higher steel shipments, improved margins and better mining performance.

Also read: ArcelorMittal reports $1,207 million net income in Oct-Dec 2020

It also said it would start a $1 billion cost-reduction programme to be completed by 2022, including productivity gains and a 20% reduction in office staff.

"This effort is complemented by an improvement in market conditions which supported a significantly improved performance in the fourth quarter," Lakshmi Mittal said in a statement.

ArcelorMittal announced on February 9 it would start a new $650 million share buyback programme after reduction of the company’s equity stake in Cleveland Cliffs.

The company said it would resume dividend payments, with an initial $0.30 per share to be paid in June, and said it would return a further $570 million to shareholders through a new share buyback programme this year.