Electrolux cuts 3,000 jobs worldwide, lowers outlook
Electrolux, the world's leading electric appliance maker, said today it plans to cut 3,000 jobs worldwide and warned it would not meet its 2008 operating profit target due to declining demand.business Updated: Dec 15, 2008 21:32 IST
Electrolux, the world's leading electric appliance maker, said on Monday it plans to cut 3,000 jobs worldwide and warned it would not meet its 2008 operating profit target due to declining demand.
"As a result of weakening demand for appliances in the two last weeks of November and in December, Electrolux will not reach its outlook for the full year of 2008," the company said in a statement.
"In light of the sharp market decline, Electrolux is reducing the number of employees by more than 3,000 in the fourth quarter of 2008 and in 2009," it said.
The company had 56,900 employees at the end of 2007.
The group has for more than a year been in the process of restructuring its business to reduce production costs, moving factories to countries where labour is cheaper.
It also raised prices in order to compensate for rising raw material prices.
The company reported a net loss in the first quarter of the year before bouncing back into a slim profit in the second quarter.
But its operating profit fell by 72 per cent to 254 million kronor during the quarter, a drop attributed to a costly product launch in North America that negatively impacted earnings.
Electrolux said on Monday that from 2008, operating income, excluding items affecting comparability, amounted to approximately 2.7 billion kronor.
"In December, demand for appliances in Europe and North America continues to show a sharp decline. As sales in December are seasonally low, there is a risk that operating income for the month will be slightly negative," it said.