Story
Evonik Shares Jump on Plan to Cut 3,200 Jobs, Divest Units
Summary
The German specialty chemicals company's stock rallied after it unveiled the second phase of its transformation program, aimed at cutting costs and reorganizing its portfolio amid a challenging industry environment.
Shares of Evonik Industries (EVKn) rallied +2.8% to €17.73 in recent trading after the specialty chemicals firm announced a major restructuring plan designed to navigate what its leadership called a "structural and economic crisis" for the industry.
Details of the Transformation Plan
The company unveiled the second phase of its "Evonik Tailor Made" transformation program, which centers on significant cost reductions and portfolio adjustments. According to the announcement, the plan includes:
- The elimination of up to 3,200 positions worldwide between 2027 and 2029.
- Approximately 2,150 of the job cuts will be in Germany.
- The divestment of two business units: the infrastructure assets group Syneqt and the C4-chemicals maker Oxeno, for which the company is currently in talks.
Evonik also stated it will reorganize its product portfolio and explore new investment projects in Asia and the Americas, where it identifies stronger growth prospects. Interim CEO Claus Rettig noted that the company's executive board, supervisory board, and employee representatives agree that the current crisis requires a decisive response.
AdMarket Reaction and Context
Investors responded positively to the strategic clarity and cost-cutting roadmap. The company confirmed the workforce reductions would be managed without compulsory redundancies, relying instead on natural attrition and voluntary early retirement and severance schemes. This approach eased market concerns about potential execution risks and labor disputes.
The stock's advance was a company-specific move, standing in contrast to flat broader market indices. It also helped offset a recent downgrade from Morgan Stanley on September 15, which had lowered its rating on the stock to Equal-weight with a price target of €18. Evonik's decisive action comes as the German chemical sector faces sustained pressure from high energy costs, weak demand, and increased competition from subsidized producers in Asia.
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