Plans to cut approximately 7,000 jobs! Chemical giant announces large-scale streamlining and restructuring

After months of planning, Evonik’s restructuring plan has finally been officially announced. On December 13, German specialty chemicals giant Evonik announced a large-scale restructuring initiative aimed at streamlining its operations. Evonik stated that in recent years, it has progressively shifted its portfolio focus toward growth, resilience, and geopolitical strategic balance. This major restructuring marks the next step forward. “The Group is launching its largest-ever restructuring program, which will result in the reduction of over one-fifth—approximately 7,000—of its workforce.” “We have significantly improved the quality of our portfolio in recent years,” said Dr. Klaus Engel, Chairman of the Executive Board of Evonik Industries. “Under the current structure, focusing solely on specialty chemicals is no longer sufficient to drive the company forward. The definition of ‘specialty chemicals’ has become entirely blurred, failing to distinguish us meaningfully from peers in the eyes of customers and capital markets. Going forward, we will manage Evonik in a more differentiated manner by leveraging two core pillars: one centered on solution- and innovation-driven businesses, and the other on technology- and efficiency-driven businesses.” Bernd Tö njes, Chairman of Evonik’s Supervisory Board, added: “We believe that with this new structure, Evonik will be able to fully unlock its profit-growth potential.” According to Evonik’s official announcement, the reform follows a “two-phase” strategy. Phase One focuses on business restructuring. Historically, Evonik’s operations were organized into four divisions: Nutrition & Care, Specialty Additives, Smart Materials, and Performance Materials. Under the new plan, these four divisions will be consolidated into two new business units—Custom Solutions and Advanced Technologies—effective April 2025, representing a fundamental reorganization of the company’s core operational architecture. According to foreign media reports, this constitutes the largest restructuring in the Group’s history. Upon completion of the reform, the Custom Solutions business unit will concentrate on niche markets, primarily supplying products for cosmetics and pharmaceuticals, as well as coating additives. It will employ approximately 7,000 people and will work closely with customers to co-develop tailored solutions. This customer-centric, high-value-added nature endows the unit with strong pricing power and positions it to prioritize future acquisition opportunities. Meanwhile, the Advanced Technologies business unit will adopt an efficiency-driven orientation, characterized by high-level technical expertise and outstanding internal operational capabilities. With around 8,000 employees, this unit will focus on high-performance polymers and hydrogen peroxide, among other areas. Notably, Evonik stated in its announcement that each of the two business units is expected to generate annual sales of approximately €6 billion. If Custom Solutions represents Evonik’s elite vanguard expanding into new markets, then Advanced Technologies serves as its solid fortress for internal capability building. As Evonik emphasized in its announcement: “The two units are mutually reinforcing and will play a pivotal role in value creation for the Group.” Phase Two of Evonik’s reform targets management itself—streamlining managerial structures across the new business units and achieving substantial long-term cost reductions. By the end of 2026, Evonik’s organizational hierarchy will be reduced from an average of ten levels to a maximum of six. Approximately 1,000 managers will transition out of managerial roles to work instead as subject-matter experts.

Behind Evonik’s suspension of M&A: The strategic transformation logic of global chemical giants

ZhiGeng Express aims to deliver concise, timely updates on key regulatory developments, innovative commercial progress, and critical financing activities both domestically and internationally—tailored for professionals in the cutting-edge biotechnology sector—to support the healthy growth of China’s biotech ecosystem. Feedback and discussion are warmly welcomed! Against the backdrop of ongoing global economic volatility, German specialty chemicals giant #Evonik Industries recently announced—as part of its comprehensive restructuring strategy—that it will suspend all merger and acquisition (M&A) activities until 2027 (with potential reconsideration of new M&A opportunities thereafter), shifting its strategic emphasis from external expansion to organic growth, and prioritizing internal structural optimization, restructuring, and sustainable development. 01 Comprehensive Restructuring Launch: From M&A-Driven to Internally Focused Since 2016, Evonik has actively expanded its market share in the #specialty chemicals sector through the acquisition of 16 companies. Key strategic acquisitions have occurred within core business areas such as “Nutrition & Care” and “Resource Efficiency,” further strengthening its capabilities in sustainable specialty chemicals and integrated system solutions. Below are selected notable acquisitions spanning biotechnology, personal care, food additives, and eco-friendly materials: ■ In the #PersonalCare & Bioactive Ingredients domain: Novachem (2023): An Argentine company specializing in sustainable biotech-derived active ingredients for skin and hair care products; Botanica GmbH (2021): A Swiss expert in plant extracts, providing natural botanical actives and enhancing Evonik’s product portfolio in natural skincare; Infinitec Activos (2021): A Spanish company focused on delivery systems for cosmetic actives, boosting Evonik’s capacity in high-efficacy skincare solutions; innoHealth (2020): A German biotech firm developing innovative active ingredients for health and beauty products; Wilshire Technologies (2020): A U.S. company supplying naturally sourced ingredients for cosmetics and personal care, broadening Evonik’s natural-ingredient supply chain; ALKION Biopharma (2016): A French biotech firm specializing in plant cell culture technologies for producing high-potency botanical actives; ■ In the #Medical & Biomaterials domain: JeNaCell GmbH (2021): A German biotech company developing bio-based cellulose materials for medical devices and skincare, enriching Evonik’s biomaterials portfolio; ■ In the #Food & Nutrition domain: MedPalett AS (2016): A Norwegian company specializing in anthocyanin-rich food ingredients, expanding Evonik’s offerings in natural antioxidants and health-focused nutrition products; ■ In the #Industrial & Environmental Materials domain: PeroxyChem (2020): A U.S. producer of environmentally friendly oxidizers—including hydrogen peroxide and peracetic acid—for applications in water treatment and food safety, reinforcing Evonik’s position in the sustainable chemicals market.

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