Industry restructuring in Europe: Why scaling down is good for operational people

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In recent months, we’ve seen major shifts in the industrial landscape across Europe, as companies adapt to rising energy costs, geopolitical tensions, and the pressing need for environmental sustainability. These challenges, while daunting, are driving a larger trend: restructuring to streamline operations, reduce costs, and focus on what truly matters—the end product. At first glance, many might view these changes as a negative outcome, particularly when it comes to job losses and organizational cuts. However, when we step back and view these events through a broader lens and longer time frame, we see that these developments may actually be positive—especially for operational staff.

A shift in perspective: The broader picture

The current wave of restructuring across organizations is primarily centered around streamlining costs at the tactical and strategic levels. While some companies are considering relocating operations or implementing major changes to their facilities, most of these decisions are still under consideration. What’s already taking shape is a conscious move toward eliminating excess management layers and creating clearer, more agile operational structures.

For operational teams, this shift offers a powerful opportunity. After years of being subject to heavy oversight and micromanagement, they’re now being given the space to reclaim ownership of their craft. As hierarchies flatten, trust rises — and with that, the freedom to focus on what they do best: producing high-quality results with precision and pride.

While some may perceive these shifts as a retreat from the broader sustainability or social impact goals companies have committed to, it’s important to view it from a grounded perspective. Businesses exist to create value through their products and services — and maintaining that core focus is not only essential for survival, but also for supporting long-term initiatives. Sustainability and impact remain meaningful, but they thrive best when built upon a strong, stable foundation.

This is a moment for operational excellence to lead the way. It’s an invitation for skilled teams to step into their full potential, with clarity, purpose, and trust. When people are empowered, results follow.

The bigger picture: embracing the shift

What if this restructuring isn’t a challenge to endure, but an opportunity to evolve? What if it’s an invitation to pause, reflect, and ask: What is truly possible from here?

Across Europe, a profound industrial transformation is unfolding. It is not driven by a single force, but by a convergence of interconnected shifts—rising energy costs, evolving geopolitical dynamics, stricter environmental frameworks, and the accelerating pace of global competition. These aren’t obstacles; they are signals. Signals asking us to look deeper, to believe in what we can create when we choose to adapt with intention and clarity.

This moment calls on companies not to react, but to realign—confidently, empathetically, and with purpose. The landscape is changing, yes. But within that change lies the potential for reinvention, for leadership grounded in sustainability, collaboration, and value creation.

Geopolitical tensions and energy prices

The global geopolitical landscape continues to shape our energy reality in profound ways. Among the most impactful events has been the Russia-Ukraine conflict—a moment that not only disrupted energy supply chains but invited deeper questions about long-term resilience and strategic transformation.

In early 2022, gas prices surged dramatically, with the Dutch TTF spot price reaching €212 per megawatt-hour—a sharp rise that sent ripples far beyond the energy markets. For industries built on energy-intensive operations—such as steel and chemicals—this wasn’t just a cost increase. It was a wake-up call. A signal to pause, reassess, and ask: How can we operate more sustainably, more independently, and more creatively?

Yes, the pressure was—and in some cases still is—immense. Operational costs soared, and for some, scaling back or even halting production became a necessity. But within this disruption lies an opening. The European Commission's analysis confirms what many are beginning to realize: challenges like these, though difficult, hold the power to catalyze reinvention.

By meeting this moment with open eyes and grounded confidence, industries can move from reaction to intention.

Impact on energy-intensive industries

Industries with high energy dependency—such as steel manufacturing and chemicals—are standing at a pivotal intersection. Their challenges are real, yet within those challenges lies an open invitation: to reimagine what’s possible when constraints become catalysts for change.

In the UK, the transition away from coal-fired power has contributed to a steep rise in electricity prices, making British steel production among the most expensive in Europe. This shift has not been without consequence. Several key facilities have closed, leading to job losses and a contraction in production capacity. These developments are not just industrial—they are deeply human.

The chemical sector, too, is navigating uncharted waters. Major players like Ineos have been compelled to shut down specific production sites, citing energy costs and rising carbon taxes that have pushed traditional operations beyond the threshold of viability.

And yet, in these very moments of pressure, new questions emerge: What new models can we embrace? How might energy efficiency, innovation, and collaboration redefine what success looks like?

This is more than a crisis—it’s a crossroads. One where the willingness to believe in new pathways, ask bold questions, and receive unconventional answers can lead not just to survival, but to a more resilient, balanced, and abundant future for all.

Policy responses and future outlook

In the face of an unfolding energy crisis, the European Union responded not with retreat, but with resolve—launching the REPowerEU plan as a bold step toward reducing dependence on Russian fossil fuels and accelerating the shift to renewable energy. This initiative is more than policy; it is a clear signal of intention: to build a future rooted in sustainability, resilience, and shared prosperity.

And while the direction is promising, the path is not without its challenges. For industries, this transition invites important questions: How do we adapt? What investments are required—not just financially, but in mindset, innovation, and collaboration?

The move toward renewables and the gradual phasing out of fossil fuels represent a complex and transformative process. It will take time, commitment, and significant resources. Yet within this effort lies the opportunity to create lasting value—not only by future-proofing operations, but by aligning with a broader vision of ecological and economic harmony.

When industries meet this transition with openness and belief in what’s possible, the process becomes more than a response to crisis—it becomes a pathway to growth, independence, and inspired innovation. The resources are there. The momentum is building. The invitation is clear.

Stricter environmental regulations: The EU's commitment to climate neutrality and its impact on industry

Alongside urgent energy concerns, the European Union remains firmly committed to a greater vision: achieving climate neutrality by 2050. This ambition, anchored in the European Green Deal, is not merely a policy objective—it is a collective call to reimagine the future of Europe as modern, resource-efficient, and globally competitive.

To realize this vision, the EU has introduced increasingly rigorous environmental regulations—necessary measures to address the pressing realities of climate change. For many industries, especially those grounded in traditional manufacturing methods, these evolving standards present undeniable challenges.

And yet, this is more than a regulatory shift—it is an invitation. An invitation to ask: How can we evolve with purpose? How can we lead in shaping the future, not just comply with it?

Adapting to these new expectations will require innovation, investment, and above all, belief in the possibility of doing business in ways that serve both planet and prosperity. As we align with this regenerative momentum, the path ahead is not defined by limitation, but by opportunity—where sustainability and industrial excellence go hand in hand.

The European Green Deal is setting the stage for a bold transformation in Europe’s economy—one that moves decisively toward decarbonization. At its core is the European Climate Law, a legally binding commitment that requires all member states to achieve net-zero greenhouse gas emissions by 2050. Along the way, intermediate targets, including a 55% reduction by 2030, will guide the way. This ambitious climate agenda is reshaping industries across the continent—particularly those in heavy manufacturing sectors, where reducing emissions means investing in cleaner, more advanced technologies.

The EU Emissions Trading System (EU ETS), which accounts for approximately 45% of the EU’s total greenhouse gas emissions, is one key mechanism driving this change. By requiring companies to purchase permits for their emissions, it creates a financial incentive to reduce emissions. However, this cap-and-trade system also introduces added operational costs. For industries already burdened with high expenses—such as energy-intensive sectors like steel and chemicals—the additional financial strain is real.

In response, the European Union has introduced the Carbon Border Adjustment Mechanism (CBAM) to prevent “carbon leakage.” This system imposes a carbon price on imports of certain goods from non-EU countries, ensuring that products entering the market meet the same environmental standards as those produced within the EU. While the CBAM levels the playing field, it adds another layer of regulatory complexity for industries already navigating the challenges of emissions reduction.

Yet, in this landscape of increased regulation and financial pressures, there are significant opportunities. The EU’s commitment to climate neutrality is not just a challenge—it is a collective call for industries to reinvent themselves, to reimagine their operations with a mindset of sustainability and innovation. And within that transformation lies the opportunity for every part of the workforce to contribute meaningfully to the green revolution, shaping a future that is both sustainable and prosperous for all.

Strategic and tactical roles under scrutiny: A deep dive into organizational shifts

As part of the restructuring process, companies are increasingly adopting strategies to streamline their management structures. The focus is on reducing bureaucratic inefficiencies, empowering workers, and improving competitiveness. Central to this effort is the flattening of management hierarchies.

Case studies of organizational restructuring

• Audi: Audi's plan to reduce 7,500 jobs by 2029 centers around simplifying its management hierarchy. The company intends to flatten its structure to just three levels, aiming to remove layers of bureaucracy and speed up decision-making.

• Bayer: Bayer is adopting a bold restructuring strategy, cutting down 99% of corporate rules and reducing managerial layers significantly, with a focus on creating self-organizing teams.

• HSBC: HSBC is considering reducing middle management layers to align its operations with global financial trends while improving efficiency.

The role of digital technologies

In the midst of restructuring, many companies are turning to digital tools, artificial intelligence (AI), and automation to drive change. These technologies are not just enhancing efficiency—they are decentralizing decision-making, empowering operational staff to make quicker, more informed decisions without the need to wait for managerial approval. This shift is enabling organizations to become more agile and responsive, with teams at all levels better equipped to contribute directly to the company’s success.

By embracing these advancements, companies are not only streamlining processes—they are creating a more dynamic and inclusive organizational structure. Operational staff are now playing a pivotal role in shaping outcomes, fostering a culture where collaboration, innovation, and speed become key drivers of growth and competitive advantage.

Financial pressures: How operational roles remain central to success

Amid rising energy costs and financial pressures, operational roles—those directly involved in manufacturing, logistics, and production—are becoming increasingly central to an organization’s success. As companies streamline operations and cut costs in non-production areas, operational staff are being empowered with greater responsibility and decision-making authority. This shift places their contributions at the core of the company’s strategy, making their involvement more crucial than ever.

In this evolving landscape, operational staff are not only vital to maintaining efficiency—they are key drivers of innovation, adaptability, and overall success, helping organizations navigate challenges with agility and foresight.

Conclusion: Why this is a positive shift for operational staff

In conclusion, the ongoing industrial restructuring in Europe—shaped by rising energy costs, stricter environmental regulations, and the need for greater operational efficiency—presents a transformative opportunity for operational staff. As companies navigate these pressures, they are increasingly turning to digital tools, AI, and automation to decentralize decision-making and reduce micromanagement. This shift not only empowers workers but also enables them to take on greater responsibility, enhancing their ability to contribute to the company’s success.

Rather than viewing these industry shifts as burdens, operational staff should embrace them as catalysts for growth and innovation. The reduction of managerial layers and the growing emphasis on sustainability and efficiency is more than just a business strategy—it’s an investment in the people who drive these changes on the ground. With more autonomy, access to advanced technologies, and a direct role in meeting sustainability goals, operational staff are well-positioned to lead the way in creating more agile, resilient, and successful businesses.

This moment is not simply about adapting to external pressures; it’s about harnessing those pressures to accelerate positive change. Operational teams are not only essential to overcoming these challenges—they are central to shaping a more sustainable and prosperous future for their companies and for the industries they support.