Steel producer ArcelorMittal South Africa (AMSA) is planning to trim its headcount by nearly half, reported Reuters, citing the Solidarity union.

This figure is reportedly higher than initially expected.

The union's statement highlighted that the job cuts would now also impact Vanderbijlpark, AMSA's flagship operation responsible for producing flat steel.

The Solidarity union revealed that AMSA had informed its employees about the impending "mass retrenchments involving more than 4,000 jobs".

The steelmaker, which produces approximately 2.4 million tonnes per annum (mtpa) of steel, had previously announced its intention to shut down its long steel plants at Newcastle and Vereeniging, affecting 3,500 jobs.

Discussions with the government have not yielded an alternative solution to the planned closures.

AMSA expressed limitations in discussing the situation publicly, citing "complexities of the matters under discussion and a cautionary announcement we issued recently".

It confirmed that "certain processes are still ongoing".

The company has been struggling financially, registering losses since 2023. It reported a half-year headline loss of R1bn ($56m), attributed to persistently low sales volumes and depressed prices.

AMSA has twice postponed the closure of its long steel operations due to various challenges including weak local demand, high electricity tariffs, poor freight logistics, competition from local scrap recycling mills and steel imports from China.

The union has criticised the government for its slow response in finding solutions.

AMSA had requested government intervention in the form of reduced scrap export duties, which it claims give recyclers an unfair advantage, and the imposition of tariffs on steel imports.

The company also sought more favourable electricity and freight costs from state-owned utilities.