PSA Peugeot Citroen to Cut 3,550 Jobs

Company expects a 17% decrease in sales in Europe in Q4

France's flagship car manufacturer PSA Peugeot Citroen slashed 3,550 jobs on Nov. 20 as the global economic crisis cut a swathe through the world's auto sector. They layoffs will be across all plants and include 850 jobs at the factory in the western city of Rennes where it produces mid and high-end cars.

Peugeot hopes to make up these numbers through voluntary redundancies. A further 900 employees will be asked to leave Rennes and take up jobs elsewhere in France building smaller, cheaper vehicles.

"These measures are only aimed at employee volunteers," Peugeot said. "In this way, the group should be able to reduce its headcount without resorting either to a collective redundancy program with lay-offs or early retirements."

Explaining the cutbacks, the company said European car sales would fall 17% in the fourth quarter of 2008, and predicted: "This recession will continue in 2009 (minimum forecast at least minus 10%)."

Falling car sales are particularly bad news for France, where the sector plays a strategic role in the economy and directly or indirectly accounts for 10% of the jobs in the workforce.

Renault has already announced 6,000 job losses, including 4,900 in France.

Copyright Agence France-Presse, 2008

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