BASF Tightens Course: Mass Layoffs and Production Shift to Asia

The German leader in the chemical sector, BASF, has presented an update to its financial strategy, which involves unprecedented spending cuts. This decision stems from persistent stagnation in the chemical products market and high energy costs, which are undermining the competitiveness of European plants. The company's management announced that previous savings measures will be significantly expanded, which in practice means moving a large part of operational activity outside Europe, with particular focus on Asian markets. Market analysts point out that this situation is not merely a temporary problem for one company, but a signal of more serious structural problems in the German economy. The company's CFO confirmed that profit forecasts for 2026 could be lowered if demand does not improve significantly. Investors on the Frankfurt stock exchange received this news with mixed feelings, although the main DAX index maintained relative stability thanks to good results in other sectors. Nevertheless, the chemical sector remains deeply on the defensive, forcing management to reduce investment outlays at its home plants in Ludwigshafen in favor of modern production complexes in the East. The chemical industry has been a cornerstone of German industry for decades, but since the 2022 energy crisis, many companies have begun to review the profitability of production in Central Europe. In the shadow of BASF's problems, other listed companies saw mixed openings. Deutsche Telekom and Siemens Energy gained in value, while companies such as Fresenius and Siemens Healthineers started the day in the red. However, the biggest losses were recorded by Delivery Hero, whose share price plummeted after the latest data release. The overall market picture is completed by skeptical analyst reports concerning the insurance giant Allianz, suggesting that despite the stable stance of the main index, individual pillars of the German economy are facing strong downward pressure. „We will continue our cost-savings program with even greater discipline to secure our competitiveness in the long term.” — Dirk Elvermann BASF's management emphasized that the current transformation is necessary for the company to maintain profitability in the face of global competition. Planned cuts are expected to primarily affect administrative and support departments, but the closure of unprofitable production lines is also not ruled out. The sharp turn towards Asia is interpreted by experts as a flight from high regulatory and energy costs in the European Union, which could lead to permanent deindustrialization of some regions in Germany.