Austrian fibre producer Lenzing AG said it is refining its strategy to strengthen competitiveness and profitability in what it called a ‘challenging environment,’ announcing sweeping cost-cutting measures, a sharper focus on high-performance fibres, and significant job reductions at its headquarters in Austria.
The company said around 600 jobs would be eliminated at its Lenzing, Upper Austria base, including roughly 300 administrative positions by 2025 and further cuts phased in through 2027. The decision, part of a multi-year restructuring program, is expected to generate annual savings of at least €25 million from 2026, increasing to more than €45 million once fully realized.
Lenzing, a leading supplier of specialty fibres such as Tencel and Lenzing Ecovero, said the restructuring will enable it to concentrate on premium fibre markets with stronger margins and more sustainable growth potential. The group also plans to divest certain assets, including its Indonesian operations, as it reallocates resources to core businesses and European production.
The company warned that the changes could result in impairments of up to €100 million in 2025, mainly in property, plant, and equipment. Despite these challenges, Lenzing said it intends to invest around €100 million in its Austrian facilities by 2027 to upgrade technologies and support higher-performance fibre production.
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Global textile and nonwoven markets remain under pressure from weak demand, high energy and logistics costs, and intensifying competition from Asian producers. Lenzing reported first-half 2025 revenues of €1.34 billion, but management said earlier cost-control efforts were not enough and additional measures were essential to secure long-term profitability.
Local unions in Upper Austria expect around 500 jobs to be cut in the near term, with about 200 reductions to take place as early as autumn 2025. The works council is negotiating a social plan to mitigate the impact on staff, though Lenzing stressed that reductions will be implemented in consultation with employee representatives.
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The company said its reorientation will emphasize sustainability, efficiency, and innovation. Beyond staff cuts, the program includes energy optimisation, tighter overhead controls, and a portfolio shift toward high-performance fibres demanded by the apparel, home textile, and nonwovens markets.
Analysts note that Lenzing’s realignment underscores the structural pressures in the fibre industry, where sustainability, cost efficiency, and product differentiation are crucial. While the strategy is designed to safeguard long-term competitiveness, its success will depend on execution and recovery in the global textile market.
