The group said it would restructure its operations in Germany by centralising advanced materials production to its Dillenburg plant and closing a coil service centre in Hockenheim.
These measures would result in yearly savings of about 15 million euros and were expected to be completed in 2024 at the earliest, the group said.
Outokumpu's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) tumbled 83% to 51 million euros ($54.55 million) in the July-September period as weakness in European markets persisted. This was below analysts' forecast of 86.6 million in a company-provided poll.
"For business area Europe, the market environment was even more difficult than during the pandemic," CEO Heikki Malinen said in a statement.
Weak European steel markets and low prices have been weighing on steelmakers' profits for the past year, after they hit record levels in 2021 and 2022.
However, Malinen said the negative trend seemed to have bottomed out and the company had seen some positive signals already, although a market recovery was expected to take time.
Outokumpu's stainless steel deliveries fell by 9% in the third quarter, but were expected to rise by 0-10% in the fourth, it said.
The group, which produces stainless steel from recycled stainless scrap, also forecast fourth-quarter adjusted EBITDA at a similar or higher level than in the previous quarter.
Swedish rival SSAB in October posted a 34% drop in quarterly operating income, while Spain's Acerinox last week said its net income dropped by a half in the third quarter.
Shares were down 6% at 0810 GMT.
($1 = 0.9348 euros)
(Reporting by Jagoda Darlak in Gdansk; editing by Milla Nissi and Louise Heavens)
By Jagoda Darlak