Evonik's Bold Restructuring: 7,000 Jobs at Stake, €12B Vision to Lead Sustainable Innovation

What Happened

On April 1, 2025, Evonik Industries AG, a leading German specialty chemicals company, will initiate a sweeping organizational restructuring designed to enhance efficiency, adapt to changing global market conditions, and strengthen its long-term competitiveness. Under this new structure, the firm will consolidate its operations into two core segments, each generating approximately €6 billion in annual revenue:

1. Custom Solutions: This segment, employing about 7,000 people, will focus on innovation-driven and high-EBITDA-contributing solutions for niche markets, including additives for coatings, cosmetics, and pharmaceuticals.
2. Advanced Technologies: With around 8,000 employees, this efficiency-driven segment will specialize in high-performance plastics and hydrogen peroxide, aiming to optimize cash flow generation and operational excellence.

As part of the restructuring, Evonik will streamline its management hierarchy by reducing from 10 to 6 management levels. In addition, 3,500 out of 8,500 existing departments will be eliminated, with potential impacts on up to 7,000 positions out of the total workforce of 32,000. The company also plans to seek external partners or joint ventures for its infrastructure business, which currently employs about 3,600 people. In a move to create a more agile organization, Evonik will abolish entire division levels, ensuring that business lines report directly to board members for faster decision-making and improved adaptability.

Leadership changes at the board level reflect a focus on global perspectives, innovation, and operational efficiency. Two new board members—Lauren Kjeldsen (51), who will oversee the Custom Solutions segment, innovation efforts, and the Americas region, and Claudine Mollenkopf (58), who will be responsible for Advanced Technologies, the Asia Pacific region, and operational excellence—will join the top ranks. Meanwhile, Harald Schwager (Deputy Chairman), Johann-Caspar Gammelin, and Joachim Dahm will depart. Thomas Wessel will remain as HR Director at least until 2028, ensuring stable leadership during a time of significant organizational change.

Evonik’s overarching strategic goals include increasing its “Next Generation Solutions”—sustainable, forward-looking products—to more than 50% of total revenue by 2030, and achieving a balanced regional revenue mix across the Americas, Asia, and Europe. The company aims to maintain a robust R&D focus in its home market while carefully adapting to reduced globalization and rising protectionism.

Market observers remain cautious. Although the company previously targeted €400 million in annual cost savings, Evonik’s stock has shown weak performance and remains under pressure. As of December 16, 2024, the share price hovered around €17.70, down approximately 0.9% over the past year. Some analysts predict further declines—potentially from €18.28 to €12.87, a drop of about 29.58%—if the company’s restructuring efforts do not deliver convincing results in terms of efficiency, innovation, and sustainable growth. Nonetheless, CEO Christian Kullmann emphasizes a deliberate, long-term approach, stating there will be “no cheap sell-offs” and underscoring the importance of a strong technological edge, especially in the Chinese market. He also highlights the need for more international and female leadership at the top.

Ultimately, Evonik’s transformation aims to create a leaner, more dynamic, and more globally balanced organization poised to excel in a complex, increasingly protectionist world. While investors and the market remain in a wait-and-see mode, the company’s newly unveiled structure and leadership team set the stage for a future defined by agility, innovation, and a heightened focus on sustainability.

Key Takeaways

• Two New Segments: Evonik will reorganize into Custom Solutions (7,000 employees, innovation-focused, niche market additives) and Advanced Technologies (8,000 employees, efficiency-focused, high-performance plastics, hydrogen peroxide).
• Significant Workforce and Structural Changes: Up to 7,000 positions may be affected, management layers will drop from 10 to 6, and 3,500 of 8,500 departments will be cut.
• Leadership Refresh: Two new board members, Lauren Kjeldsen and Claudine Mollenkopf, step in as key leaders, while three senior executives depart. Thomas Wessel remains as HR Director until at least 2028.
• Strategic Goals: Increase Next Generation Solutions to over 50% of revenue by 2030, diversify revenue equally across the Americas, Asia, and Europe, and maintain strong R&D at home.
• Market Skepticism: Although restructuring aims to boost agility and sustainability, investors remain cautious. The stock has been weak, and analysts await proof of successful execution before adjusting their outlook.

Deep Analysis

Evonik’s restructuring signals a strategic pivot that aligns with major trends in the global specialty chemicals industry, where sustainable solutions, geopolitical tensions, and evolving customer demands shape competitive landscapes. By leaning into sustainable “Next Generation Solutions” and boosting innovation in custom additives for coatings, cosmetics, and pharmaceuticals, Evonik is positioning itself as a premium, future-ready supplier that can weather shifting consumer preferences and environmental regulations.

The Advanced Technologies segment’s emphasis on high-performance plastics and hydrogen peroxide capitalizes on efficiency and consistent cash flow generation. These core chemicals are integral to various industries, including automotive, aerospace, and renewable energy. Streamlining management layers and having business lines report directly to board members should not only reduce costs but also increase responsiveness to market fluctuations, especially in regions like Asia Pacific, where the company aims to maintain a technological edge.

Yet, execution risks loom large. Cutting thousands of jobs, restructuring departments, and seeking infrastructure partners will test internal cohesion and employee morale. Meanwhile, geopolitical shifts and trade barriers mean that Evonik must carefully balance its ambitions for global diversification with the realities of regional protectionism. The strategic decision to keep R&D anchored at home ensures a stable innovation pipeline, but it also relies on the company’s ability to translate homegrown research into globally resonant products.

Market skepticism is understandable. Investors have seen other chemical giants struggle to realize promised efficiencies and growth following big reorganizations. With predictions of further share price declines, Evonik needs to demonstrate tangible improvements in EBITDA margins, sustainable product uptake, and balanced geographic revenues. If these steps succeed, Evonik could redefine its narrative as an agile, forward-thinking leader in the specialty chemicals space. If not, ongoing market doubts may intensify.

Did You Know?

• Balancing Regions: Evonik’s goal to evenly split revenue across the Americas, Asia, and Europe is a strategic bid to minimize overreliance on any single market, a response to the world’s shifting trade landscapes and rising protectionist tendencies.
• Sustainability Ambitions: By 2030, over half of Evonik’s business should come from Next Generation Solutions—sustainable products that meet stricter environmental standards, reflecting the company’s commitment to green innovation.
• Infrastructure Partnerships: The firm’s plan to find joint venture partners for its infrastructure business (3,600 employees) underscores a broader industry trend of focusing on core specialties and teaming up with external players for ancillary operations.
• From 10 to 6 Management Levels: Reducing the number of management layers aims not only at cost savings but also at accelerating decision-making. This flatter structure is expected to enhance the company’s adaptability to fast-changing market conditions.
• Long-Term HR Stability: Maintaining Thomas Wessel as HR Director until at least 2028 provides continuity during a period of radical change, ensuring steady guidance on employee transitions, organizational culture, and workforce development.

In essence, Evonik’s massive restructuring effort is a gamble on adaptability and innovation amid a rapidly evolving chemical market. With new leadership, a sharper strategic focus, and a leaner structure, the company hopes to secure a place at the forefront of sustainable specialty chemicals for decades to come.