Under the name Shape the Future, Germany’s Wacker Chemie has launched a new efficiency program aimed at saving €250 million a year by reducing material costs and in-house services as well as reorganizing its corporate structure to get closer to customers and enhancing profits.

The scheme foresees the loss of more than 1,000 jobs, mainly in Germany, by the end of 2022. The axe will hit the Munich-based chemical producer’s administrative departments and indirect, non-operational, functions of its business divisions.

The bulk of the cuts (more than 80%) will affect the German workforce, which accounts for 10,000 of its 14,500 employees worldwide.

Wacker said is currently talking to employee representatives about contract buyouts, in addition to early retirement or semi-retirement. If enough workers take advantage of the offers, there will be no need for compulsory layoffs, it added

 “We are preparing for a harsher competitive environment – both in our polysilicon business and at our chemical divisions,” said CEO Rudolf Staudigl He said management’s aim is “not only to achieve significant cost-savings, but also to decisively strengthen Wacker for tomorrow’s challenges and secure a long-term competitive edge.”

Financial results for 2019 published at the end of January showed the Wacker group’s preliminary EBITDA down 16% to €780 million, including €112.5 million in insurance compensation for a 2017 accident. The company said “markedly reduced” prices for solar-grade polysilicon and lower selling prices for standard silicones dampened earnings as did the steep rise in German electricity prices. It also took an impairment charge of €760 million on polysilicon facilities.