BASF's Balancing Act: Job Cuts, Housing Sale, and a €2.3 Billion Savings Target Define a Pivotal Year

BASF slashes 2,800 jobs at Ludwigshafen while pouring €1.5B yearly into the site, raises cost-saving target to €2.3B, sells 4,400 homes, and prepares agri IPO.

BASF is executing a delicate two-track strategy at its historic Ludwigshafen home base: slashing costs while pouring €1.5 billion annually into the site. Chief executive Markus Kamieth used the annual general meeting in Mannheim to reaffirm the chemical giant’s commitment to its birthplace, even as the restructuring bites deep.

The numbers on the table are stark. Since the start of 2024, roughly 2,800 positions have disappeared from the Ludwigshafen site alone. Group headcount now stands at about 106,000 globally — around 5,000 fewer than in the first quarter of 2025. A labour agreement rules out compulsory redundancies at the main plant until the end of 2028.

Yet the cost-cutting programme is already running ahead of schedule. By the end of 2025, BASF had secured annual savings of roughly €1.7 billion — €100 million more than originally planned. Management has now raised the target: by the end of next year, recurring cost reductions are expected to hit €2.3 billion, up from the previous ambition of €2.1 billion. Certain administrative functions in HR, finance and digital services are being shifted increasingly to India.

The first-quarter results paint a mixed picture. Revenue came in at around €16 billion, nearly €500 million below the prior-year period, hurt by currency effects from the US dollar and the Chinese renminbi across all segments. But earnings per share climbed to €1.06 from €0.91. For the full year 2026, BASF forecasts EBITDA before special items between €6.2 billion and €7.0 billion, with free cash flow in a range of €1.5 billion to €2.3 billion.

One of the most visible moves in the reshaping is the sale of the bulk of the company’s housing stock via its subsidiary BASF Wohnen + Bauen. About 4,400 residential units are on the block — 3,300 as a single portfolio and the remaining 1,100 as individual condominiums. The bidding process is now entering its decisive phase, with first detailed talks with qualified buyers, including the city of Ludwigshafen, starting this month. BASF hopes to have a long-term investor lined up by early 2027.

The sale has drawn sharp criticism from the IGBCE trade union, which calls it a disposal of "family silver" and warns it could sever the social fabric between the company and its workforce. But for BASF, the divestment is part of a broader portfolio overhaul that also includes preparations for a planned initial public offering of its agricultural solutions segment, targeted for 2027.

That IPO is officially in the hands of Livio Tedeschi, who joined the board on 1 May and now oversees the Agricultural Solutions division. He and Mary Kurian are the two newest faces on the executive team. Several board members, including Katja Scharpwinkel and Stephan Kothrade, have been buying BASF shares in early May, at prices between roughly €52.79 and €54 — below the current market quotation of €51.54.

Despite a year-to-date gain of about 15 percent, the stock has given back roughly six percent over the past 30 days. The relative strength index stands near 74, suggesting the near-term move may be overstretched. A dividend of €2.25 per share was paid on 6 May.

Kamieth insists the investment push in China’s Zhanjiang integrated site is not coming at the expense of German operations — "production is not migrating to China," he said. But headwinds persist. BASF expects chemical output in the EU and the US to continue shrinking on weak demand and high import pressure. The Middle East conflict remains an open risk for energy and raw-material prices, and the planned IPO of the agribusiness unit will hinge on how the macroeconomic backdrop evolves through 2027.