German chemical giant BASF has announced a drastic tightening of its savings program in the face of an unabated downturn in the industry. The conglomerate, the world's largest chemical producer, has announced further job cuts of thousands, the relocation of some investments to Asia, and radical cuts to investment expenditure at its home plant in Ludwigshafen. These decisions aim to save profitability in light of forecasted profit declines in 2026.
Drastic reduction in employment
The conglomerate has already announced the elimination of 4,800 jobs and is announcing further staff cuts to optimize its cost structure.
Relocation of production to Asia
BASF intends to shift investments and jobs from Germany to more dynamically developing Asian markets.
Decline in forecasted profits
Management warns of a deterioration in financial results in 2026 due to the ongoing stagnation in the chemical industry.
Alarm in Ludwigshafen
The company's historic production center in Germany will face a drastic reduction in investment expenditure.
German chemical giant BASF, considered a global industry leader, has announced a significant expansion of its savings program. This decision is a direct reaction to the prolonged crisis in the chemical sector, high energy costs in Europe, and weakening global demand. The company's management confirmed that 4,800 jobs have already been eliminated, but this is not the end of the restructuring. New plans involve further operational cost cuts, which are expected to bring billions in annual savings. A key element of the new strategy is a shift in investment directions. BASF plans to reduce expenditure at its historic headquarters in Ludwigshafen, shifting capital and jobs to Asia, specifically to China, where it sees greater growth opportunities and lower production costs. The company's CFO warned investors that profits in 2026 could be lower than originally projected if the current downward trend is not halted. This situation impacts the entire DAX index, which, despite turmoil in the chemical sector, is trying to maintain a stable position thanks to good results from other companies like Deutsche Telekom or Siemens Energy. The chemical sector in Germany forms the foundation of its industry, but since the energy crisis triggered by Russia's invasion of Ukraine in 2022, it has been grappling with record gas prices. BASF, as one of the largest energy consumers in Europe, has become a symbol of the difficulties faced by the economic model based on cheap raw materials. The market reaction to the news from Ludwigshafen was mixed. On one hand, analysts appreciate management's determination to cut costs; on the other, they fear for the long-term competitiveness of German industry in the face of deindustrialization. While BASF fights to preserve its margins, other German entities, like Delivery Hero, are experiencing sharp share price declines, deepening uncertainty on the Frankfurt stock exchange. Nevertheless, positive signals from technology and energy companies allowed the DAX index to end the session without drastic losses, suggesting some resilience of the German market to the crisis in traditional manufacturing branches. „Watch BASF CFO on Cost Cuts Amid Chemicals Slump” — BASF CFO Regional authorities and trade unions express deep concern about the future of the region. Job reductions on such a large scale could hit the local economy and supply chains linked to the Ludwigshafen plants. However, the company emphasizes that without painful adaptation to new market conditions, the stability of the entire group could be threatened in the coming years.