Lenzing Streamlines Indonesian Operations, Trims 600 Jobs at Headquarters

Lenzing cuts staff and infrastructure. The Austrian company, which specializes in the manufacture of cellulose fibers, has confirmed that it will cut 600 jobs at its central plant in the country. The company, which closed 2023 in the red, will also conduct a strategic review of its Indonesian operations, including the possible sale of the facility.

The Austrian group has pointed to “the weak recovery of the Chinese market due to tariff uncertainties, among others, as well as low generic fiber prices in China and rising labor, energy and raw material costs” as the main reasons for the decision. The workforce cuts in Austria mainly affect Lenzing’s administrative functions.

The company’s chief operating officer, Georg Kasperkovitz, stated that “the refining of the strategy has difficult but unavoidable consequences for some 600 of the more than 3,500 employees in Austria.“ However, he added that reducing labor costs is one of several elements necessary to “increase profitability and unlock the value of Lenzing”.

Lenzing recorded a negative net result of €11.1 million in the first nine months of 2024

Lenzing will carry out a review of operations, including the possible sale of the production plant in Indonesia, one of the largest viscose centers globally. As a result, the company expects a negative impact on consolidated pre-tax profit (ebit) and net income.

The company, however, expects an increase of up to 6% in demand for regenerated cellulose fibers globally over the next five years to boost its business. Lenzing’s target is thus to achieve gross operating profit (ebitda) of €550 million by 2027.

The group ended the first nine months of 2024 with a negative net result of €11.1 million, compared with a loss of €96.7 million in the same period of 2023, a 15% increase. However, it managed to increase its turnover by 5.5% with sales valued at 1,958 million euros.