Raw steel prices have fallen by nearly 20 per cent over the past 12 months, eroding margins across the European steel sector. CEO Herbert Eibensteiner stated that the group is responding with a rigorous cost-cutting programme aimed at saving approximately €300 million annually. “Voest is therefore cutting costs,” Eibensteiner said, noting that the restructuring is necessary to withstand the current economic downturn.
The company faces demand weakness in three major customer segments: consumer goods, construction, and mechanical engineering. In response, Voestalpine plans to implement major personnel cuts at its European plants. However, in Austria, the company will reduce costs primarily by cutting overtime and temporary workers rather than permanent headcount. Annual personnel costs in Austria alone amount to €2 billion. Despite these measures, the total number of employees at Voestalpine increased by 694 to 50,712, likely reflecting growth in higher-demand sectors such as automotive, aviation, and railway, which the group intends to prioritize in the future.
The broader Austrian steel industry has stabilized after the severe downturn of 2022, which was driven by the energy crisis and rising production costs. According to World Steel data, Austria produced 7.1 million tons of steel in 2024, remaining flat compared to 2023. This performance placed Austria 23rd in the global ranking of steel-producing countries, down from 22nd in 2023. The industry’s stability comes as it adapts to a new economic environment through cost optimization and decarbonization investments aligned with EU requirements, though weak European demand continues to restrain further growth.
Voestalpine operates two steel plants in Austria: Voestalpine Stahl Linz, with an annual production capacity of 6 million tons, and Voestalpine Stahl Donawitz, with a capacity of 1.57 million tons. While the EU’s overall steel production increased by 2.6 per cent in 2024 to 129.5 million tons, global production fell by 0.9 per cent to 1.84 billion tons. The company’s financial trajectory will likely be monitored closely as it executes its savings targets amid continued global economic uncertainty.
