Lenzing refines strategy: Job cuts in Austria despite major investments

2 October 2025

Lenzing refines strategy: Job cuts in Austria despite major investments

Aerial photo of the Lenzing AG industrial site in Upper Austria with factories, green fields, and mountains in the distance.

Introduction

Lenzing AG is one of Austria's industrial figureheads, a company many Austrians regard with pride. As a global leader in sustainable fibers such as TENCEL™ and ECOVERO™, Lenzing has long stood for technological innovation, ecological responsibility, and works with international fashion brands including H&M, Zara, Uniqlo, Levi's, Tommy Hilfiger, and Diane von Furstenberg. Its success has positioned Austria firmly on the map of the global textile and nonwovens industry.

Strategic shift and job cuts

Faced with rising costs, fierce competition from Asia, and a volatile global trade environment, Lenzing has refined its strategy to secure long-term competitiveness. The focus will shift more strongly toward high-margin premium fibers such as TENCEL™, VEOCEL™, and LENZING™ ECOVERO™, while gradually withdrawing from lower-margin commodity segments.

As part of this restructuring, the company will reduce around 600 jobs in Austria by 2027, with 250 positions to be cut by the end of 2025. The cuts will mainly affect administrative functions at the headquarters in Lenzing. Despite a recent improvement in profitability, the company stresses that further efficiency gains are necessary to strengthen resilience in an uncertain market environment.

Investments at Austrian sites

At the same time, Lenzing plans to invest more than EUR 100 million into its Austrian sites in Lenzing and Heiligenkreuz by 2027. The Heiligenkreuz plant is to be further developed as a global benchmark for environmentally friendly specialty fiber production. In Lenzing, new technologies and strategic partnerships are in preparation to support the company's premiumization strategy.

While an international expansion, particularly in Asia and North America, is part of the plan, Austria remains a cornerstone of Lenzing's production and innovation network.

Support for employees – and a broader debate

Austria's labor minister Korinna Schumann has expressed concern over the scale of the job reductions but assured that support measures will be put in place through the public employment service AMS. Trade unions GPA and PRO-GE also pledged full support for the affected employees, warning against the loss of valuable know-how at the Austrian site.

Despite investment pledges, the restructuring raises questions about the attractiveness of Austria as an industrial location. Rising costs, coupled with global competitive pressures, suggest that even flagship companies such as Lenzing face increasing difficulties to maintain large-scale employment at home.

Image: Aerial view of Lenzing AG’s production site in Upper Austria, showing factory facilities, surrounding infrastructure, and the Alpine landscape in the background. Photo: Content Creator - Dronework Austria/Robert Pichler; Copyright: Lenzing AG/Robert Pichler