Electrolux, the world’s leading manufacturer of small household appliances, announced on Monday the elimination of 3,000 jobs across its subsidiaries worldwide, also warning that due to declining demand it will not achieve its targeted operating profit for 2008.
"Due to the weakening demand for household appliances in the last two weeks of November and in December, Electrolux will not meet its forecast for 2008.", the company’s statement said."Given the sharp decline in the market, Electrolux is forced to lay off over 3,000 of its employees in the fourth quarter of 2008 and in 2009," the statement further noted. At the end of 2007, Electrolux had 56,900 employees. According to the company, there was a significant drop in demand for household appliances in Europe and North America during the last two weeks of November. The weak market negatively impacted the company’s sales volume and product mix during the fourth quarter, making it impossible to achieve an operating profit of 3.3 to 3.9 billion kronor (309 to 365 million euros) in 2008. In the third quarter, the company recorded a 72 percent decline in operating profit, to 254 million kronor, due to the launch of expensive products in North America, which negatively affected profits. Electrolux has been in the process of restructuring its operations for over a year to reduce manufacturing costs and is relocating factories to cheaper countries. It has also raised prices to offset the increase in raw material costs. (H)
