Economy Chemicals group BASF tightens its austerity course
BASF, the world's largest chemical company, is stepping up the pace of its cost-cutting program. By the end of last year, an annual cost reduction of 1.7 billion euros had been achieved, reported Chief Financial Officer Dirk Elvermann on Friday. This exceeds the target by 100 million.
27.02.2026, 10:47
SDA
The company intends to intensify its cost-cutting measures: BASF is now targeting annual cost savings of 2.3 billion euros by the end of the current year instead of the original plan of 2.1 billion euros, he said. Elvermann put the one-off costs for the expenses at a total of 1.9 billion euros.
Job cuts for managers too
As part of its cost-cutting programs, the chemical company is cutting thousands of jobs: around 4,800 employees would have left the company between December 2023 and December 2025, it said. According to BASF, around half of these will be in Germany. The number of managers has fallen by eleven percent. At the end of 2025, BASF still employed just under 108,300 people worldwide.
BASF is struggling with cost pressure, overcapacity on the global market, high energy prices and low capacity utilization at its main plant in Ludwigshafen. Around 33,000 people work there, around a third of the global workforce. Management and employee representatives recently reached an agreement that rules out compulsory redundancies in Ludwigshafen until the end of 2028.
CEO Markus Kamieth expressed his satisfaction with the progress made in reducing costs. BASF had become significantly leaner. However, the chemical industry is facing strong headwinds worldwide. The manager does not expect a short-term recovery in the current year either. 2026 will probably be another year of transition.
Chinese Verbund site in Zhanjiang needs time
Kamieth also expects the new Verbund site in Zhanjiang in southern China, which recently went into operation with investments of 8.7 billion euros and around 1,000 employees, to take some time to get up and running: a slightly negative contribution to earnings is expected in the first year of operation. This is mainly due to the start-up costs. A positive contribution is then expected from 2027.
BASF's target for the current year is earnings before interest, taxes, depreciation and amortization (EBITDA) and special items of between 6.2 billion and 7.0 billion euros. In the past fiscal year, this figure fell by 686 million euros to 6.6 billion euros compared to the previous year.
Sales at BASF shrank by just under three percent year-on-year to just under 59.7 billion euros in 2025. On balance, the profit attributable to shareholders rose from 1.3 billion to 1.6 billion euros. This was partly due to extraordinary income from the sale of the architectural coatings business to the US group Sherwin-Williams. The dividend for shareholders is to remain unchanged at 2.25 euros per share.
