FRANKFURT (Reuters) - Thyssenkrupp's 27,000 steel workers must brace for deep cuts, the new head of the conglomerate's steel division told a German newspaper, setting the stage for significant layoffs.

"Tough cuts are necessary. We have to become more profitable," Dennis Grimm, spokesperson for Thyssenkrupp Steel Europe's (TKSE) executive board, told Westdeutsche Allgemeine Zeitung (WAZ) in an interview.

"The current market situation has deteriorated again in recent months, and unfortunately there is no recovery in sight."

TKSE is emerging from a major clash with its parent over funds that are required in a proposed 50:50 joint venture structure with Czech billionaire Daniel Kretinsky, who already owns a 20% stake in the steel business.

Grimm said that currently a new business plan was being developed for TKSE and it was unclear how many jobs could have to go.

"We can't yet put an exact figure on how many people we will employ once the business plan has been finalised and negotiations with the employee representatives have been completed," Grimm told WAZ.

"But it will be fewer than today."