Electrolux to axe 1,600 jobs in global streamlining plan

Electrolux is to make 1,675 workers redundant as it announces the decision to implement a plan to improve efficiency throughout the group.

Redundancies as a result of its global reorganisation will amount to 875 non-production positions, as the company identifies opportunities to improve efficiency in its consumer and professional businesses.

In January, it spilt off the professional division to form a separate company.

A further 800 staff will be lost at its Jászberény production plant (pictured top) in Hungary as the company moves to outsource production of vacuum cleaners and a significant part of the freestanding refrigerators produced there.

The company anticipates restructuring costs of SKr1.6 billion (£132m) in Q3 (results due on October 25), which will have a negative impact of SKr400 million on the quarter.

These measures are also hoped to generate additional annual savings of around SKr500m (£41.2m) as from 2022. This, combined with its ongoing programme to sharpen efficiency should, it said, bring total annual costs savings of around SKr3.5 billion (£288.6m) with effect from 2024.

There will, however, be investment in its manufacturing operations in Hungary, as the group pumps SKr8bn over five years (from 2018) to “strengthen competitiveness and drive profitable growth”. It will invest €100m (£88.9m) in automation, digitisation and innovation capabilities at its Nyíregyháza plant.

The reorganisation moves in February involved creating four consumer-focused regional business areas, “ensuring a unified approach to each market with common branded platforms and interactions with consumers”. This saw its Home and Care and SDA divisions, previously responsible for vacuum cleaners and well-being products combined with the four major-appliance business areas.

In its Q2 results for 2019, the Electrolux Group reported sales of SKr31.6bn, up 1% from the same quarter the year before (SKr31.3bn), with operating profits of SKr1.6bn (up 96% on Q2 2018’s SKr827m due to exceptional items) with profits for the half-year to June up 17% from SKr1.59bn to SKr1.86bn.

Electrolux’s Nyíregyháza plant in Hungary will see an SKr8 billion investment


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