German chemical company Lanxess is implementing further cost-cutting measures, including a reduction of 550 positions, primarily in administrative functions, as it navigates a challenging market environment. The move comes as the company anticipates a difficult 2026, with potential for improvement only in the second half of the year, potentially driven by German government infrastructure spending.
Lanxess initially announced production-related cost savings of €50 million per year last August. The latest measures aim to generate an additional €100 million in annual savings by the end of 2028. The company’s stock was down 3 percent in early trading on Thursday, March 19, 2026, compared to the previous day’s Xetra closing price.
In an effort to reduce labor costs in the short term, Lanxess has agreed to a 35-hour workweek for salaried employees through the end of the year. Management and non-union personnel will see no increases to their base salaries, the company said. These actions reflect the significant headwinds facing the chemical industry.
“The year 2025 was extremely hard for the entire chemical industry and also for Lanxess,” said CEO Matthias Zachert in a statement accompanying the company’s financial results. “For 2026, we see positive impulses earliest in the second half, for example through the infrastructure package of the Federal Government.”
Lanxess reported a 17 percent decline in operating profit to €510 million for 2025. Analysts had, on average, predicted an adjusted EBITDA of approximately €516 million. Revenue fell by 11 percent to €5.67 billion, even as the number of employees decreased by 5 percent to 11,709. The company recorded a net loss of €577 million for the year, despite plans to maintain a dividend of €0.10 per share.
The company attributed its performance to weak demand across most customer industries, leading to lower sales volumes. Declining raw material prices and pricing pressure from Asia also contributed to lower selling prices. The sale of the Urethane Systems business in April 2025 and unfavorable currency effects further impacted results.
In response to geopolitical tensions, including the conflict in Iran and the resulting increases in energy, raw material, and logistics costs, Lanxess has announced price increases of 50 percent or more for certain products not subject to existing contracts. This move underscores the challenges companies face in managing supply chain disruptions and inflationary pressures.
