Leading home appliances maker Electrolux today said it will be trimming its global workforce by more than 3,000 employees primarily in the wake of weakening demand in Europe and North America.
The company has also warned that there could be more job losses as it continues to move production capacity to low-cost countries.
Electrolux in a statement today said that due to weakening demand for appliances in the two last weeks of November and in December, it would not achieve the outlook for the full year of 2008.
"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," the firm said.
The firm has about 57,000 employees worldwide. Electrolux noted that fall in demand for appliances in Europe and North America, in the last two weeks of November, has adversely impacted its sales volume and product mix for the fourth quarter.
For this year, the company had expected to have an operating income (excluding items affecting comparability) of 3.3 to 3.9 billion Swedish krona.
"Electrolux continues to move production capacity to low-cost countries in accordance with the restructuring programme launched in 2004. The programme, which will be completed in 2009 and 2010, will further reduce the number of employees," the statement said.
As of November, the company's operating income (excluding items affecting comparability), stood at about 2.7 billion Swedish krona.
Pointing out that cost-saving measures would be further intensified, bringing down the headcount by over 3,000 employees in the fourth quarter and in 2009, would result in costs to the tune of 1.2 billion Swedish krona.
"The costs for these actions are approximately 1.2 billion Swedish krona and will be charged against operating income before items affecting comparability in the fourth quarter of 2008.
"The savings are expected to amount to approximately 1.1 billion Swedish krona on a yearly basis, with full effect as of 2010," the statement said.
Electrolux is the latest entity to announce job cuts on the back of worsening global financial turmoil. Last week, many companies including Japanese electronics giant Sony Corp and US banking major Bank of America had announced massive layoffs.