Algoma Steel highlights new strategy after layoffs as it looks to lower costs

SAULT STE. MARIE – The CEO of Algoma Steel says he recognized the need to accelerate the company’s plan to lower its costs well before tariffs came into play, as the company plans to let go of more than 1,000 workers. 

Michael Garcia says in a statement that the strategy includes transitioning to electric arc furnace steelmaking, closing its blast furnace and coke-making operations early next year, as well as reshaping its product mix to better align with the demand of the Canadian market.

Preceding Canada-U.S. trade tensions, he says the company held a view that the electric arc furnace was key to securing its future, modernizing its plant and broadening its product offerings. 

Mike Da Prat, president of USW Local 2251, says 900 members of his union working at Algoma will be laid off starting in March, leaving workers anxious and stressed ahead of the holiday season. Bill Slater, president of United Steelworkers Local 2724, says about 150 of his members are affected. 

The company reported almost half a billion dollars in losses last quarter as the 50 per cent tariffs on steel imposed by the U.S. effectively shut it out of the market.

The federal and Ontario governments have also provided Algoma with $500 million in financing to help support the company during the market turmoil. 

“Without the opportunity to transition to the EAF, and the liquidity support provided by Large Enterprise Tariff Loan (LETL) from the federal government and province of Ontario, make no mistake, Algoma Steel would have experienced an even darker day – months ago, most likely its last,” Garcia said in the statement. 

This report by The Canadian Press was first published Dec. 2, 2025.

Companies in this story: (TSX: ASTL)