Lenzing announces worldwide cut of around 2,000 jobs by the end of 2027

The program "Grow Nonwovens, Reset Textiles" was approved on Monday by the Management Board and Supervisory Board, which was signed off on Monday by the Management Board and Supervisory Board. Under the strategic program "Grow Nonwovens, Reset Textiles," Lenzing intends to focus more strongly on profitable business areas and improve its competitiveness. In the first quarter of 2026, a positive result was achieved. The last positive result was recorded by the group in 2021.

CEO Kasperkovitz speaks of a "difficult but necessary decision." The company is aware that the job cuts will affect many employees. It wanted to position the company for long-term growth in higher-value market segments, said Georg Kasperkovitz, CEO since the end of May. However, it is by no means a closure and cost-cutting program in the course of the new strategy, Lenzing CEO Georg Kasperkovitz told APA, pointing to the confidence in the plans shown by shareholders and other financiers, who are providing up to 600 million euros in fresh capital.

Heiligenkreuz site facing closure

Fiber production at the sites in Heiligenkreuz in Burgenland and Grimsby in England will be phased out by the end of 2027. A social plan already exists for the 285 employees in Heiligenkreuz. Lyocell Managing Director Bernd Zauner, meanwhile, faced the workforce on Tuesday. 285 employees currently still work in Heiligenkreuz. According to the company, an existing social plan applies to them.

The company wants to relocate the production of specialty fibers to its core production sites. In Lenzing in Upper Austria, existing lines are being converted and modernized. While plants are being closed or sold, the main Lenzing site in Upper Austria is to be expanded, according to the company. Research, development and central corporate functions are to play an even more important role there in the future. The headquarters in Lenzing in Upper Austria will also be upgraded.

Grimsby and Indonesia also affected

The site in Grimsby, England is also being abandoned. The plant in Grimsby, England, with more than 225 employees, is also set to fall victim to the restructuring. The production facility is to be closed one year after the Heiligenkreuz plant, at the end of 2027. In addition, production in Indonesia, which was only recently converted and modernized, is being sold off. In Thailand, China and at the US site in Mobile, Alabama, production for local markets is to continue.

The company is looking for a buyer for the site in order to retain as many jobs as possible. According to CEO Georg Kasperkovitz, a buyer is to be found as quickly as possible. The goal is to retain as many jobs as possible. In Heiligenkreuz, production is to be gradually phased out by the end of 2027. The site itself is to be sold. If no buyer is found by then, the plant will be closed and 320 employees will lose their jobs.

At the plant, more than 80,000 tons of the wood-based fiber are produced annually. The "Reset" aims at greater resilience and profitability and an investment focus on value-creating applications, Deutsche Bank analyst Lars-Vom-Cleff wrote in an initial reaction. Deutsche Bank analysts had expected a negative stock market reaction to the announcement, but view the strategic realignment of the group after several loss years as generally positive.

Share price loss and financing

Shares in fiber manufacturer Lenzing plunged by almost 17 percent on the Vienna Stock Exchange on Tuesday morning and were worth just 20.30 euros at last. The shares temporarily lost up to 17 percent and were trading at 21.35 euros in the late afternoon. Revenue in 2025 amounted to 2.6 billion euros. In 2025, the company was in the red by more than 135 million euros.

In the course of the restructuring, the group also expects impairments of up to 150 million euros, as well as additional restructuring costs of up to 40 million euros. Overall, up to 600 million euros in fresh capital is available, according to the company. Up to 600 million euros in fresh funds is to be provided for the strategic realignment. Part of this is to be raised through a capital increase, on which shareholders are to vote at the end of August.

In addition, a "comprehensive refinancing agreement with the key lenders" was reached. A capital increase of up to 300 million euros is to be approved by shareholders at an extraordinary general meeting at the end of August. The financing of the new strategy is supported by the core shareholders B&C Group and Suzano as well as by Oberbank. Wir glauben, dass jetzt endlich der große Schritt getan wurde. Wir investieren bei der geplanten Kapitalerhöhung um bis zu 300 Millionen Euro noch einmal rund 100 Millionen – im Vertrauen darauf, dass das die Situation von Lenzing auf dem Weltmarkt stärkt.

The Lenzing Lyocell "war Empfänger des Großprojekts mit der höchsten Fördersumme (EU und national) im gesamten Ziel-1-Burgenland-Programm". Of eligible investments of around 110 million euros, 23.1 percent or 25 million euros was subsidized by the EU, the federal government and the state of Burgenland. On July 2, 1997, the first 300-kilogram bale of Lyocell fiber rolled off the press in Heiligenkreuz.

Political reactions in Burgenland

Around two-thirds of revenue comes from products for the fashion industry. Lenzing fibers are used, among other things, in eco-editions of fashion chains such as H&M. In the summer of 2022, Lenzing celebrated the production of the one millionth ton of the wood-based, biodegradable Lyocell fiber at the site, attended by State Governor Hans Peter Doskozil and other guests of honor.

Already around a year earlier, Lenzing had announced the elimination of up to 600 administrative positions. In Burgenland and among the social partners, the current announcement triggered a political alarm. Preserving the plant and the jobs is the top priority, said Burgenland State Governor Hans Peter Doskozil (SPÖ). Should it turn out that a stake by the state is necessary to secure the site, then we are prepared to take this path as well, said Doskozil. All options would be examined – from a temporary stake by the state to majority ownership. Doskozil could also imagine further developing the site through additional research and development or new business areas.

Works council chairman Philipp Perl said there had been "keinerlei Anzeichen" for a closure, especially since the site was in the black. Perl, who comes from the Jennersdorf district and has worked at the plant for 14 years, expressed dismay at the closure. Damit verlieren wir rund 500.000 Euro an jährlichen Einnahmen aus der Kommunalsteuer, said Mayor Eduard Zach (SPÖ). Therefore, solutions for those affected were to be worked out together with employee representatives, the company said. A solution is to be sought at the social partner level together with policymakers.

Chamber of Commerce warns of chain reaction

Andreas Wirth, President of the Burgenland Chamber of Commerce, spoke of an alarming message at the WK Burgenland's summer talk on Tuesday. Die Nachricht ist extrem erschreckend, weil wir die Folgen noch nicht kennen. Was heißt das für die Zulieferbetriebe, was heißt das in der Wertschöpfungskette und in der Region. Wirth spoke of a "sehr dramatische" situation for the region and the employees and warned of "verheerenden Folgeschäden". Mit einem Betrieb ist das noch nicht aus. Ich fürchte, es wird noch weitere Betriebe treffen. He again called for bureaucracy reduction and lower energy and labor costs to secure Austria as a business location. Es werde keinen Schnellschuss geben, weil die Produktion noch bis Jahresende laufe. The consequences for the value chain and the region are also not yet foreseeable.

The Chamber of Commerce sees a shortage of skilled workers in many sectors; apprenticeships need to become more attractive, said Wirth. Energy costs must fall, the business location must become more attractive, and bureaucracy must be reduced. The "Future Factory"