U.S. Steel has announced layoffs are in the works for its Lone Star Tubular Operations in Lone Star. As a fallout from a downturn in the oil and gas industry because of the global COVID-19 pandemic, the company plans to lay off 24 employees next week, leading up to idling the Lone Star mill by the end of the month.

U.S. Steel’s Lone Star Tubular Operations will begin laying off hourly workers next week, starting with 24 employees, but the company expects all or most of the steel mill to be idled by the end of the month.

The company indicated its expectation to idle the plant in information presented to investors at the end of March.

Trey Green, president of United Steelworkers of America Local 4134 in Lone Star, said the company has updated previous guidance about the future of the plant located 25 miles north of Longview.

Originally, Green said the company had indicated a portion of the plant might continue operating.

“Now, they’re saying the likelihood of them running after June is probably not going to happen anymore,” he said. “That’s all up to orders and what happens.”

The plant has about 500 hourly workers, Green said, and layoffs would start next week with 24 people.

Wire reports say the Pittsburgh-based company had issued notices of plans to lay off up to 6,500 people, but that the company said the number would be closer to 2,700.

On Thursday, U.S. Steel reported a $391 million net loss for the first quarter.

“Over the past several weeks, we have announced a series of actions in response to the coronavirus pandemic (COVID-19) and the significant changes in the global oil and gas markets,” U.S. Steel President and CEO David B. Burritt said in a written statement on the company’s website. “We continue to serve customers and the stakeholders who count on us as an essential business. Challenging days are ahead, but I am confident in the men and women at U.S. Steel who are continuing to make steel as a critical part of our nation’s infrastructure and progress our ‘best of both’ integrated and mini mill technology strategy. We remain calm and focused to ensure a stronger U.S. Steel for all of our stakeholders.”

Burritt said market activity had started to improve before the COVID-19 pandemic and issues in the global oil and gas market emerged.

“As the impacts from these unprecedented market dynamics became apparent, we adjusted our footprint, fortified our balance sheet and aggressively cut costs,” he said. “While these decisive actions helped us exceed our first quarter guidance, we have quickly turned our attention to the second quarter to not only ensure the safety and health of our employees but also to preserve cash and liquidity.”

The company also is idling other facilities.

The local U.S. Steel plant is accustomed to the cyclical nature of the business that is closely tied to the oil and gas industry. 

“Every three to five years, we usually see a dip or change in the market,” Green said. Those last few cycles have “immensely” affected the Lone Star plant. The last major layoff was in 2015, he said.

“It’s five years. There are circumstances in this one that are outside the norm with the COVID-19, … but a lot of it is really market and trade, as well,” he said.

He said the Lone Star plant is probably the largest employer in Morris County, drawing workers from as far away as Texarkana, Tyler and Longview. 

“It doesn’t just affect our local community here,” Green said. “Basically, the economics of the whole area get hurt when the plant goes down here.”