Thyssenkrupp Maps Out 11,000 Steel Job Cuts as Earnings Spike Masks Revenue Chill

Thyssenkrupp to cut 11,000 steel jobs (42% of unit) in radical overhaul; Q2 profit jumps to €198M, stock rallies 25%. Revenue declines, but market bets on long-term gains.

Thyssenkrupp is pushing ahead with one of its most radical restructurings in years, unveiling plans to shed or outsource up to 11,000 positions in its steel division — roughly 42% of the unit’s 26,000-strong workforce — as part of a broader drive to slim down the loss-making business. The move comes alongside a sharp jump in quarterly earnings that has sent the stock soaring, even as the group’s top line continues to shrink.

The Essen-based conglomerate posted an adjusted operating profit of €198 million for the second fiscal quarter, a massive leap from the €19 million recorded a year earlier. Analysts had braced for far less. Revenue, however, dipped modestly to just under €8.4 billion, and chief executive Miguel López trimmed the group’s full-year revenue target, now forecasting a decline of up to 3% — a downgrade from previous guidance that had left the door open for a slight increase. The profit forecast, by contrast, remains unchanged.

Steel’s surprising contribution amid deep cuts

The improvement in profitability can be traced largely to the very steel division that is now in the crosshairs of the job-cutting programme. Lower raw-material and energy costs lifted the bottom line, while the unit’s own cost-saving measures gained traction ahead of its planned legal separation from the parent group. To tackle overcapacity, Thyssenkrupp intends to sell its stake in the Hüttenwerke Krupp Mannesmann to rival Salzgitter, targeting a completion date of 1 June.

The restructuring will come with hefty one-off charges, but the market is betting on long-term gains. Shares advanced roughly 4% on Thursday to €10.81, bringing the month’s rally to nearly 25% — comfortably above the 50-day moving average. The stock closed at €10.39 the previous Wednesday, reflecting a steady upward trajectory.

Analysts pencil in higher targets

Several investment banks have updated their models in response to the quarterly results. Jefferies reiterated a buy recommendation with a price objective of €13, with analyst Tommaso Castello noting that the ongoing efficiency programmes are on track. JPMorgan lifted its fair-value estimate to €11.80, citing an improved valuation of Thyssenkrupp’s stake in the elevator business. Citigroup described the earnings beat as a clear sign that pressures in the core operations have begun to ease.

The portfolio shake-up also includes the planned carve-out of the Materials Services unit, giving management greater strategic flexibility. A stabilising steel market has further bolstered the case for pressing ahead with the overhaul.

Defence spin-off faces headwinds

Not all parts of the group are riding the same wave. Bernstein Research trimmed its target for the TKMS naval division to €76, pointing to cooling sentiment across the defence sector — a trend visible in peers such as Rheinmetall. Still, TKMS’s order book remains heavy, and the division continues to pursue a major Canadian submarine contract worth north of €10 billion. A decision between Thyssenkrupp and South Korea’s Hanwha Ocean is expected sometime between May and June 2026.

For now, investors are betting that the aggressive cost-cutting at steel, combined with a friendlier market backdrop and falling oil prices, gives the management team enough breathing room to execute its portfolio overhaul without fresh earnings shocks. The next test will be whether those 11,000 job reductions can be implemented without disrupting the very operations that just delivered the group’s most encouraging profit performance in quarters.