Volvo Electrolux Slash Total of 4000 Jobs

Volvo, Electrolux Slash Total of 4,000 Jobs

Volvo's net profit fell 5% and profit at Electrolux slumped by nearly 30%.

STOCKHOLM - Industrial heavyweights Volvo ( IW 1000/96) trucks and Electrolux  (IW 1000/278) announced a total of 4,000 job cuts around the world on Friday when they published disappointing figures for the third quarter.

The two companies, major players in the auto and home appliance industries, will each axe 2,000 jobs, they said in separate statements.

Volvo's net profit was far below analysts' expectations, and profit at Electrolux slumped by nearly 30%.

Volvo, a leading manufacturer in the global truck industry, said: "As part of the previously announced Group-wide efficiency program, a directional decision has been made to rationalize white collars in staff and support functions by approximately 2,000 employees and consultants."

The firm said that third-quarter net sales fell to 64.9 billion kronor (US$10.2 billion, a drop of 5% compared to the same period last year.

Net profits were also down one percent, to 1.4 billion kronor, sharply below analysts' expectations for about two billion kronor.

Volvo chief executive Olof Persson said the firm's third quarter "was characterized by the ongoing comprehensive product renewal in the group's truck program and the fact that we entered a new phase of the group's development focused on taking actions to streamline and enhance the efficiency of our operations."

The Volvo Group employs 112,000 worldwide, including 16,000 consultants and temporary workers.

Home appliance maker Electrolux also announced a cost-reduction program that would kick in during the fourth quarter of 2013 and mainly affect operations in Europe, the Middle East and Africa.

"Approximately 2,000 employees are affected by these actions," the company said.

The company unveiled the program as it released figures for the third quarter, showing net sales rising by just 0.3% from the level a year earlier to 27.1 billion kronor.

The company reported net profits of 655 million kronor during the quarter, a drop of 28.9% from the same period in 2012.

"Demand in several of Electrolux core markets in Europe continued to decline," the company said, saying sales in western Europe dropped 1% during the quarter from a year earlier.

Electrolux currently employs 60,200 people globally.

Copyright Agence France-Presse, 2013

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