The Netherlands arm of India's Tata Steel said Tuesday it has requested government support to furlough 4,600 people, around half of its Dutch workforce.
Tata, operating under its European name Corus, applied with the Social Affairs Ministry for a 6-week furlough for the workers.
Under an economic stimulus package announced by the government last month, if the request is approved the state will fund 70 percent of the worker's salaries while they are off work, with Tata contributing 30 percent.
Furloughs can be extended for up to 24 weeks under the program. Dutch unemployment is currently around 4 percent.
Corus said last month it would cut crude steel production by 30 percent, temporarily shutting several blast furnaces in Britain and the Netherlands. It cut 400 jobs in Britain.
Corus is Europe's second largest steel producer and produces around 20 million tons of steel a year.
Facing oversupply and slowing demand, Europe-based steel companies are cutting back production drastically and asking workers to stay home during the winter months.
The world's largest steel maker, ArcelorMittal SA, said last week it would cut 9,000 jobs worldwide — 3 percent of its workforce — as it reduces output by at least a third.