As part of an organisational realignment, BASF will reduce its workforce by a total of about 6,000 positions until the end of 2021. As a result, the company expects savings of EUR 300 million as part of the ongoing excellence programme, which is anticipated to contribute EUR 2 billion to earnings annually from the end of 2021 onwards.
According to BASF, the staff reductions result from the organisational simplification and from efficiency gains in administration and services as well as in the operating divisions. In addition, central structures are being streamlined in the context of the announced portfolio changes. The company said it will continue to need additional employees in fields like production or digitalisation, depending on future growth rates. These measures are intended to create greater customer proximity, increased competitiveness and more profitable growth.
“We will set up the new organisation with a clear focus on leveraging synergies, reducing interfaces and enabling flexibility and creativity,” said Dr. Martin Brudermüller, Chairman of the Board of Executive Directors of BASF.
Customer-focused operating divisions, service units and regions as well as a lean Corporate Center are the cornerstones of BASF’s new organisation. The Corporate Center will consist of less than 1,000 employees and will support the Board of Executive Directors in steering the company as a whole. This includes central responsibilities, among others in the areas of strategy, finance, legal, human resources and communications.
In addition, around 29,000 employees will be working in cross-functional service units. “Global Engineering Services” and “Global Digital Services” will in future offer their services either for individual sites or globally for business units of the BASF Group, “Global Procurement” will make purchasing more effective. “Global Business Services” will be newly established and will form a worldwide network of about 8,000 employees providing end-to-end services. They will support the business units with services, among others from the areas of finance, human resources, communications and supply chain. The unit “Global Business Services” will be led by Marc Ehrhardt, currently head of the Finance division.
The role of regions and countries is being sharpened, said BASF. They represent the company locally and support the growth of business units with local proximity to customers. First changes will take effect on 1 January 2020.
In view of the current changes and further changes planned until the end of 2021, management and employee representatives have jointly decided to move forward the start of negotiations on a new site agreement for the BASF SE in Ludwigshafen, Germany. The current site agreement is valid until the end of December 2020. The goal is to sign a new agreement in the first half of 2020.