Reduced demand for steel balls and railway wheels has forced the management of steelmaker Arrium to cut 120 jobs from its operation in Newcastle by mid-June as part of the restructuring process at its Waratah division.
The company announced in March that it would cut 100 jobs on top of the 20 positions that were axed earlier.
According to the article on The Australian, the restructure will cost Arrium $15 million, but will deliver $14 million in savings each year.
Arrium’s steel and recycling business has suffered because of the opening of a new facility in Indonesia that manufactures grinding balls, as well as by enduring weakness in the domestic and offshore steel markets.
Arrium Managing Director Andrew Roberts said the company estimated that its production volume in the second half of the 2013/14 financial year would drop about 45% compared to the corresponding period from a year earlier, resulting in a hit to underlying earnings in the second half of between $15 million and $17 million.
He said the company expected flat sales in the second half of the FY compared to the first half due to delays on major projects such as the Pacific Highway in NSW and Sydney’s Barangaroo development.
The Australian Manufacturing Workers Union (AMWU) was swift to react on the redundancy news, urging the Federal and NSW governments to do more to support workers in Newcastle, which has also been hit by other job cuts in recent months.
NSW Premier Mike Baird acknowledged that the mining industry was facing immense pressure, but said the Government was taking steps to address the issue, pointing out the payroll tax rebate on offer to companies that employ staff laid off in mass redundancies.