Algoma Steel announced it will issue 1,000 layoff notices effective March 23, 2026, after confirming its plan to close the blast furnace and coke-making units in Sault Ste. Marie. The decision follows tariff-driven costs and shrinking access to the US market.
What changed for Algoma Steel
The company confirmed it will release 1,000 workers as it prepares to halt blast furnace and coke-making operations in early 2026. This action comes after months of rising tariff expenses tied to tighter US import rules. As these rules intensified, Canadian producers faced new barriers when shipping steel to the United States, and the economics of cross-border supply shifted sharply.
In addition, Algoma noted that the North American steel supply chain depends on steady cross-border movement. However, the 50 percent tariff rate on foreign steel has reshaped shipment costs and reduced margins. Shipments to the United States currently represent about half of Algoma’s total steel volumes, which increases the overall impact.
Impact on workers and operations
The layoffs will reduce Algoma’s workforce to a significantly smaller size. The company had 2,818 full-time employees as of December 31, 2024, and the reduction will remove more than one-third of that number. Leaders said the operational change aims to protect long-term stability as tariff pressures continue to rise. They also warned that ongoing expenses now require difficult adjustments to maintain competitiveness.
For the three months ending September 30, Algoma recorded direct tariff costs of C$89.7 million. These expenses created financial strain and pushed the company to accelerate its timeline for restructuring. As a result, management moved toward a new production model sooner than expected.
Shift to electric arc furnace steelmaking
Algoma plans to begin producing steel through an electric arc furnace in early 2026. This date is one year earlier than the company’s original schedule. The transition is meant to reduce exposure to tariff-related costs. It also aligns the company’s operations with market conditions that increasingly favour more flexible and lower-cost methods of steelmaking.
Company executives said the shift is essential for securing Algoma’s future. They also noted that many steelmakers must now adjust capacity and processes to match new economic realities.
Next on the line
Algoma said it will continue the transition while keeping workers and local stakeholders informed. However, the company did not announce any additional decisions regarding production levels or staffing.
