Umicore slashes 260 jobs in its battery materials division

Belgian multinational Umicore, a company specializing in materials technology for electric car batteries, is cutting about 260 jobs worldwide. Some 100 jobs are disappearing in Belgium, including 71 in Olen and the rest in Brussels.

The construction of a new plant for battery materials in Canada will also be postponed. The measures are expected to save the group about 40 million on an annual basis from 2025.

Result from sluggish sales of EVs

Umicore CEO Bart Sap is again making cuts in its once highly acclaimed battery materials division. After already posting a 1,6 billion euro reduction in value in July due to sluggish EV sales, it is now proceeding with restructuring measures.

It will cut costs by eliminating about 260 jobs. In Belgium, about 100 jobs will disappear, most of them at the research and development operations at the Olen site and some corporate functions in Brussels. Umicore, in which the Belgian state has a 5% stake through its financial arm SFPIM, has also launched the information and consultation phase of the Renault law.

Plans for the Canadian plant have been postponed again

Plans to build a recycling plant for battery materials in Europe, which Flanders had hoped to bring in, had already been postponed. Still, the construction of a battery materials plant in the Canadian province of Ontario is also being postponed indefinitely.

In addition, the head of the battery materials division, Ralph Kiessling, is also being thanked for services rendered. Furthermore, research and development activities for heavy-duty diesel applications in Hørsholm, Denmark, will be discontinued and transferred to Hanau, Germany.

Materials for battery producers in the North American market will, in the future, be exported from Umicore’s plant in Cheonan, Korea. One of Umicore’s main customers in the North American market is the Volkswagen Group and AESC, the Chinese battery producer in which BMW has a stake.

Umicore also plans to reduce the headcount at its production facility in Jiangmen, China.

Expensive NMC batteries

The problem for Umicore, once a colonial mining company, is that the battery technology on which it was once fiercely committed, namely the production of battery materials for NMC batteries, has fallen completely out of favor. NMC batteries contain nickel and cobalt and are very pricey. But for several years now, the cheaper LFP batteries from Chinese makers, made from iron and phosphate, have been scoring much better in terms of performance.

As a result, more and more carmakers, with Tesla in the lead, have switched to LFP batteries for their cheaper models. The more powerful NMC battery is increasingly found only as a component in the most expensive cars.

This shift from NMC to LFP – the Umicore plants for NMC materials cannot technically produce LFP batteries – creates a huge problem for the group. As a result, Umicore’s battery division, once described as their golden goose, has now become a problem division, with many analysts speculating about a possible sale for the troubled battery division.

New strategy

Next spring, Umicore, which employs about 12,000 people worldwide, including about 3,500 in Belgium, is expected to unveil its new strategy. Although Umicore’s stock has halved since the beginning of the year and is at its lowest level in more than a decade, other analysts still believe in Umicore’s approach to battery materials.

They point out, for example, that Umicore’s NMC batteries are suitable for e-trucks, buses, or vans, which travel longer distances, and that the market is growing slower than expected.

Of course, it remains to be seen what the impact of Trump’s presidency will be on the EV and battery industry. Trump is expected to pursue protectionist trade policies, which would likely include increased tariffs, especially for Chinese goods. Lithium-ion cells already face a 25% tariff under the Biden administration for EVs, and the new administration may raise this tariff further.