TATA Steel's Long Products business announced restructuring proposals to help strengthen its competitiveness.

The proposed changes affect predominately management and administrative functions at sites in Scunthorpe, Teesside and Workington and could lead to the loss of around 500 jobs. About 340 positions could be affected in Scunthorpe, 90 in Workington and 40 in Teesside.

TATA Steel said “The proposals come amid a prolonged downturn in demand for some of the key products made by the Scunthorpe-based business, including the UK market for construction steel, which is about half of 2007 levels.”

Mr Karl Koehler CEO of TATA Steel’s European operations said: “European steel demand this year is expected to be only two thirds of pre crisis levels after falls in the past two years. On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry. As difficult as the proposed changes are, they are intended to build a stronger future by enabling the Long Products business to compete in even the current challenging economic and regulatory conditions.”

He added “We will of course engage fully with employees, trade unions and our political stakeholders during this restructuring process. We will do everything we can to support our employees through this unsettling time.”