Tata Steel to cut 500 jobs in northeast England Tata Steel is to cut about 500 jobs in the northeast of England as the profitability of its plants continues to be hampered by sluggish European demand. About 340 jobs will be lost in Scunthorpe, 90 in Workington and 40 in Teesside. The three plants employ 5,000 people in total. "European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years," said Karl Koehler, chief executive of Tata Steel's European operations. The job cuts cap a torrid period for the troubled steelmaker, India's largest private-sector steelmaker by revenue, and follow a $1.6bn writedown against the performance of it lossmaking European division announced in May. Nic Dakin, MP for Scunthorpe, said that a "struggling steel industry in Europe" is "reshaping the workforce." Mr Dakin was, nevertheless, optimistic about Tata's role at the Scunthorpe plant. "Tata turned around Jaguar and Land Rover, and they're in the process of turning around Tata Steel," he said. Ahead of a meeting on Thursday with the company to discuss the latest cuts, unions representing steelworkers voiced their dismay at the continuing contraction of Tata Steel's UK operations. "Tata Steel is trying to sack its way out of a downturn rather than thinking strategically about selling steel and looking at the long-term," said Paul Reuter, national officer with the Unite union. The GMB union said the news was a shock to the affected workforces. Last week Tata was awarded contracts to provide tracks for Network Rail until at least 2019. Around 40 per cent of the company's UK steel production is exported, while the remaining 60 per cent is sold domestically. There won't be a wholesale closure of the British steel industry, but individual plants might close, largely as a result of pressure from China Peter Fish, analyst at Meps The company has faced speculation that the Tata conglomerate, its Mumbai-based parent company, is considering assets sales at its UK steel operations, although Tata Steel executives have denied this. Peter Fish, an analyst at the consultancy Meps, said that overcapacity in the steel industry may eventually have to be tackled by closing plants. "There won't be a wholesale closure of the British steel industry, but individual plants might close, largely as a result of pressure from China," he said. China now provides around half of the world's steel. Tata Steel reported a loss of $1.3bn during the last financial year, although its divisions in India and elsewhere in Asia continue to be profitable. While Tata Steel insists the restructuring is a response to reduced demand over several years, the cuts further underline the importance - made plain during last week's fight over the future of the Grangemouth complex - of UK government energy policy. The relatively high level of UK energy costs for industry and rising environmental taxation is a major issue for heavy energy users. Tata Steel said that its energy costs were 60 per cent higher in the UK than it would pay in Germany. "On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs on the steel industry," Mr Koehler said. Tata Steel announced separate plans to cut about 900 jobs in the UK last year, mostly at its plant at Port Talbot in south Wales.