Two of Sweden’s manufacturing heavyweights unveiled plans Friday to cut thousands of jobs, amid continued uneasiness about how quickly European demand will return for a range of big-ticket items from heavy trucks to washing machines.
Appliance manufacturer AB Electrolux and truck maker Volvo AB each plan to trim about 2,000. The companies—with a combined 176,000 workers world-wide—posted lower net profit in the third quarter than the same period a year ago.
The moves in Sweden come as part of a continued wave of retrenchments by major European firms. High costs, weak European markets and the need for organizational restructuring are fueling these actions.
Last month, German industrial giant Siemens AG said it is slashing 15,000 jobs, a third of which will take place in Germany. French telecom-gear maker Alcatel Lucent SA, will lay off 15% of its global workforce, or 10,000 people, with its French employee base being hit particularly hard.
Electrolux Chief Executive Keith McLoughlin, scrambling to boost the Swedish appliance maker’s presence outside Europe, said even though a U.S. housing recovery is helping stimulate demand for white goods, “challenging marketing conditions” in Europe are dragging down the company’s view. He said 500 of the job cuts will come when the company closes a refrigerator factory in Australia, and the remaining 1,500 will take place mainly in Europe. The company will begin considering changes at its appliance factories in Italy, which could lead to further job cuts.
Electrolux said its European operations, especially in Southern Europe, weighed on volumes and earnings in the third quarter. It expects market demand for appliances in Europe to decline by 1% to 2% for the full year of 2013.
Volvo, one of the world’s largest truck makers, will slim down its rank of management, support and consulting staff. Its downsizing plan is part a wider effort to cut 4 billion Swedish kronor ($630 million) in annual costs.
The world’s third-largest truck maker by trucks sold said it expects the size of the European heavy-duty truck market to remain unchanged in 2014, as it reported lower third-quarter sales and earnings than expected.
Chosen excerpts by Job Market Monitor. Read the whole story at