Tata Steel Ltd. has announced the closure of its two blast furnaces in the U.K., resulting in the potential loss of up to 2,800 jobs at its Port Talbot steelworks in Wales.

What Happened: The closures are part of Tata Steel’s plan to revamp its loss-making U.K. steelmaking business by transitioning to lower carbon electric arc furnaces, a move supported by a £500 million ($634.10 million) government investment, reported Reuters on Friday.

The company anticipates 2,500 roles being affected within the next 18 months, with an overall job loss estimated at 2,800. Tata Steel will initiate a consultation process as part of the restructuring and aims to maximize voluntary redundancies.

Despite the challenges, Tata Steel’s CEO, T V Narendran, believes that the proposed changes are necessary for the long-term sustainability of the U.K. business. The company, which currently employs over 8,000 people in the U.K., had previously warned of potential redundancies when the government announced its funding package to safeguard 5,000 jobs in September.

The shift to electric arc furnaces, which require fewer workers than blast furnaces, is expected to significantly impact the local area, where Tata Steel is a major employer. The company has pledged a £130 million support package to assist affected employees in retraining and finding new jobs.

Why It Matters: The decision to close the blast furnaces comes after months of speculation and discussions about the future of Tata Steel’s U.K. operations. In November 2023, Tata Steel’s CEO confirmed that the company was in talks with U.K. unions to discuss the restructuring of its Port Talbot site, including a potential shift to electric-arc furnace production.

Photo: Shutterstock by T. Schneider

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