Volvo, Electrolux slash jobs in upset for Swedish economy
Stockholm: Swedish industrial heavyweights Volvo trucks and Electrolux announced a total of 4,000 job cuts around the world today 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 percent.
Volvo, a leading manufacturer in the global truck industry, said, "As part of the previously announced Group-wide efficiency programme, a directional decision has been made to rationalise white collar staff and support functions by approximately 2,000 employees and consultants."
The firm said that third-quarter net sales fell to USD 10.2 billion, a drop of five percent compared to the same period last year.
Net profits were also down one percent, to USD 10.2 billion kronor, sharply below analysts' expectations for about two billion kronor.
Volvo chief executive Olof Persson said the firm's third quarter "was characterised by the ongoing comprehensive product renewal in the group's truck programme 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."
He told the Swedish news agency TT, "It's clear that we will see measures in our major markets such as Sweden, France, the United States and Japan."
The Volvo Group employs 112,000 worldwide, including 16,000 consultants and temporary workers.
Home appliance maker Electrolux also announced a cost-reduction programme 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 in a statement.
Among major steps foreseen by the company was the closure of a factory in Orange, Australia, with production to be concentrated at a facility in Thailand.