Tata Steel says could cut around 500 UK jobs

LONDON (Reuters) - Tata Steel , Europe's second-largest steel producer, said on Tuesday it could cut around 500 jobs under plans to restructure the part of its British business that supplies the construction and engineering industries.

Changes to its long products business - which makes tubes, rails and rods, used in many industrial sectors - will affect management and administrative jobs at sites in northern England, primarily Scunthorpe, where 340 positions could be lost, Tata said.

It blamed a prolonged downturn in demand, particularly for construction steel in Britain, a market which is at about half of 2007 levels.

"European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the past two years," Karl Koehler, CEO of Tata Steel's European operations, said.

"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."

The $500-billion-a-year steel industry, a gauge of the health of the global economy, has suffered from a drop in demand from austerity-hit Europe and worries about the outlook for the Chinese economy.

Tata has battled tough conditions in Europe almost since taking over steelmaker Corus in 2007, just before the global financial crisis, and Tuesday's cuts follow a major restructuring of its long products unit in 2011, with the loss at the time of about 1,500 jobs in Britain.

Tata said then that it was mothballing parts of its Scunthorpe plant to refocus on high-value markets.

(Reporting by Clara Ferreira-Marques; Editing by Kate Kelland, John Stonestreet)

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