Hydro to cut 750 white-collar jobs: Cost control or structural overhaul?

The announcement comes against a backdrop of widespread job cuts in the aluminum industry, driven by the United States' steep 50 per cent import tariff. In Canada, for example, Canada Metal Processing Group was forced to lay off 140 employees as a direct consequence of the tariff. Hydro, however, is largely insulated from this pressure, thanks to extensive domestic sourcing, pass-through pricing, and minimal cross-border exposure. Its Hydro Extrusions and Aluminum Metal division holds a 15–20 per cent share in key segments of the European automotive market, and with only 6 per cent of Europe's vehicle production bound for the US, the tariff's impact on Hydro remains limited.

Then, what's the real reason?

According to Hydro, this action is part of the decision to scale back 2025 capital expenditure from NOK 15 billion to NOK 13.5 billion. But focusing cuts solely on white-collar roles suggests a move to realign resources with strategic goals and evolving business needs.

As the layoffs specifically target only white-collar roles, jobs related to staff and support functions, engineering, commercial, supply chain, and IT across group functions, Business Areas, and Global Business Services are at risk. Blue collar positions, like production, maintenance and press operators within the Business Areas, are not affected by this process.

"By taking this step now, rather than later, we strengthen Hydro's resilience and position ourselves to compete and succeed in a world where geopolitical unpredictability accelerates volatility and creates new risks," says President and CEO Eivind Kallevik.

However, the cuts will not stop at 750 because Hydro expects to identify a further 150 positions for elimination from 2026 through planned efficiency initiatives. While the company is not directly hit by US tariffs, knock-on effects - such as higher prices prompting more cautious aluminum purchasing in downstream and end-user sectors - have reinforced Hydro's cautious outlook and strict cost discipline.

Even the GDP in the second quarter of 2025 increased by only 0.1 per cent in the euro area and 0.2 per cent in the EU, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the first quarter, GDP had increased by 0.6 per cent in the euro area and by 0.5 per cent in the EU. All this has prompted Hydro to reduce its capex outlook.

In its Q2 results, Hydro made it clear that its capital expenditure guidance is directly linked to heightened uncertainty in both demand and the broader economy. The company is therefore prioritising risk mitigation and agility in responding to shifting economic and policy conditions. But notably, this strategy places only white-collar roles at risk.

However, the key takeaways could be Hydro is prioritising hands-on expertise and physical labour over digitally driven workforces and that its production expansion plans - which will require more blue-collar workers - remain firmly on track.

Hydro's expansion pipeline

Hydro is pressing ahead with a series of major growth and sustainability projects despite its cost-cutting drive:

It is investing EUR 180 million in a new recycling plant in Torijia, Spain, with an annual capacity of 120,000 tonnes of extrusion ingots made from post-consumer aluminum scrap. This facility, set to begin operations in 2026, will enhance Hydro's low-carbon recycled aluminum production capacity to 200,000 tonnes when combined with the nearby Azuqueca plant.

In the US, Hydro has formed a 50/50 joint venture with PADNOS, investing USD 4 million in Alusort LLC in Michigan, focusing on advanced aluminum scrap sorting using HySort technology. This venture aims to double production and expand the portfolio of recycled products. Additionally, Hydro Aluminum Henderson has secured USD 17.4 million in tax credits for its HyForge project, increasing production capacity by 28,000 tonnes with a carbon footprint over 30 per cent lower than current US options.

Hydro Energi is expanding its power portfolio with long-term Power Purchase Agreements (PPAs), including a notable agreement with NTE for 660 GWh of renewable electricity from 2027 to 2029. Hydro's existing contracts include 9.4 TWh of captive power production and approximately 10 TWh from other long-term sources.

In Norway, Hydro is upgrading its hydropower production in Rjukan, planning a new pumped storage power plant and a tunnel connection, targeting a 50 per cent increase in the Mana River's annual output. Hydro Rein, backed by a partnership with Macquarie, aims to have 1.7 GW of projects operational this year, with another 8.4 GW under development in Brazil and the Nordics.

Hydro has partnered with Nemak to develop low-carbon aluminum casting products for the automotive sector, targeting a CO2 footprint below 3 kg of CO2 per kg of aluminum. This project will utilise more post-consumer scrap and cleaner energy sources.

Lastly, in collaboration with Wilson ASA, Hydro has launched the "Wilson Eyde," an energy-efficient vessel designed for transporting raw materials. This vessel features wind-assisted propulsion and aims to reduce logistics emissions by 30 per cent by 2030, aligning with Hydro's commitment to minimising its environmental impact.

Summing up

Hydro's layoff strategy can be viewed as part of its 2030 sustainability and profitability goals and its shift in vision where it wants to divest from non-core ventures or those facing unfavourable market conditions and invest in specialised human expertise whose skills and labour cannot be replaced by automation technology.