Swedish steel maker Ovako said on Tuesday it planned to cut its workforce by 8 percent to save 45 million euros ($50 million) annually, the latest in a wave of restructuring efforts in an industry plagued by overproduction.
Ovako, owned by private equity firm Triton, said restructuring would take place over the next two years and lead to net lay-offs of 250 out of its total workforce of around 3,000. Savings would have full effect from 2018, Ovako said.
Growth in Ovako's market is expected to be low in the next three years, Ovako Chief Executive Tom Erixon said in statement.
"The European production capacity in engineering steel is dimensioned for the market peak in 2007, and this is reflected at Ovako too in terms of overcapacity," he added. "This is not sustainable in the long term."
Ovako made earnings before interest, tax, depreciation and amortisation (EBITDA) of 69 million euros last year on sales of 697 million euros.
Sweden's SSAB said last week it planned staff cuts as it reported a surprise operating loss for the third quarter.