BASF accelerates cost-cutting and layoffs as 2026 outlook remains cautious

BASF, the German chemical giant, is accelerating its cost-cutting program despite receiving billions of euros in government subsidies.

CEO Markus Kamieth stated, “From today’s perspective, we do not expect a significant market recovery in the short term, nor a meaningful easing of the geopolitical situation.”

The BASF CEO added that the start of the first quarter has been “challenging,” as anticipated. According to the CEO, a gradual improvement in the global market environment is expected “only late this year and particularly in 2027.”

Consequently, the world’s largest chemical company remains cautious for 2026. Management forecasts an adjusted EBITDA of €6.2 billion to €7.0 billion.

This range falls below the €7.02 billion expected by analysts. Last year, the figure stood at €6.6 billion.

Due to persistent weak demand, BASF is focusing on significant cost reductions and strengthening its balance sheet. The company now expects €2.3 billion in annual savings by the end of 2026, up from the previously planned €2.1 billion.

Headcount has already decreased significantly: at the end of 2025, BASF’s total staff was approximately 4,800 lower than at the end of 2023, and the number of managers had fallen by 11%.

“2026 looks to be another transition year in which our industry will face significant challenges,” Kamieth noted.

Therefore, the group continues to rationalize its investments. Between 2026 and 2029, only €13 billion will be invested—a 20% reduction from the four-year figure announced a year prior.

Last year, BASF slightly missed its own forecast. Sales fell by approximately 3% to €59.7 billion, while adjusted EBITDA declined by more than 9% to €6.6 billion.

Nevertheless, shareholders will receive an unchanged dividend of €2.25 per share.

Overall, BASF recorded a significantly higher net income. However, this was driven solely by special income: last year, the group benefited from initial payments from the German government under state guarantees for the former Russian operations of its affiliate, Wintershall Dea.

According to the annual report, the group received approximately €900 million from the state treasury in 2025. This money stems from Wintershall Dea’s dividend payments and significantly improved the group’s free cash flow in 2025.

Wintershall Dea has thus successfully exercised its first claims arising from state guarantees provided by the German government for its abandoned operations in Russia.

In 2016, the former oil and gas producer received investment commitments for Russian gas fields. After the outbreak of war in Ukraine in February 2022, Wintershall was effectively nationalized by Russian moves.

In 2024, BASF sold Wintershall’s operating activities to the British company Harbour Energy. Claims arising from state guarantees remained with the subsidiary, and thus indirectly with BASF (72.9% stake). The remainder is held by the London-based investment firm Letter One.

BASF expects the payment of an additional €800 million in state guarantees in 2026, with the majority of this amount to be paid in the first quarter.

These revenues do not aid BASF’s operational activities. The group has taken several steps toward further restructuring.

The announcement that a significant portion of administrative functions concentrated in Berlin will be moved to India has recently drawn the ire and sharp criticism of labor unions.

BASF operates a service center in the German capital that serves locations worldwide. Some 2,800 employees work in payroll, controlling, and IT. In 2023, they moved into a new office building in Prenzlauer Berg.

Now, this location will be significantly downsized, handling tasks that can be “consolidated in a regionally sensible manner,” according to BASF.

Finance and human resources services will be consolidated at a new global hub in India, while all services related to supply chains will be merged in Malaysia.

BASF cites costs and changing business requirements as the reasons for this decision.

It remains unclear how many people will lose their jobs in Berlin, but the measure could affect more than 1,000 employees. The Mining, Chemical and Energy Industrial Union (IGBCE) reacted with anger, noting that in 2005, a collective bargaining agreement had made it possible for BASF to concentrate internal services in Berlin rather than outsourcing them to Slovakia. This flagship project is now being terminated.

On Friday morning, the union and BASF’s Berlin employees planned to stage a protest against the relocation.

Resistance is also forming at the company’s Ludwigshafen headquarters. BASF announced that it will sell 4,400 company-owned apartments in the region to further strengthen its balance sheet.

Alongside the IGBCE, the Rhineland-Palatinate state government has also voiced its concerns regarding the relocation.