STOCKHOLM – Electrolux AB (ELUXB), the world’s second-biggest home appliances maker, said it will eliminate 2,000 jobs after reporting third-quarter earnings below analysts’ estimates, and plans to close a factory in Australia and move production to Thailand.
Its stock slumped the most in eight months.The maker of AEG vacuum cleaners said in a statement on Friday that it is also reviewing the competitiveness of its four Italian manufacturing plants. Added to other measures, Stockholm-based Electrolux expects annual savings of about 1.8 billion kronor (US$284 million).
“We expect these actions to have a positive impact on our cost position and contribute to our margins,” Chief Executive Officer Keith McLoughlin said in a separate release. Electrolux expects to take 3.4 billion kronor in charges related to the measures in the fourth quarter and 2014.
The Swedish company is expanding in emerging markets and moving production to low-cost countries to counteract weakness in Europe. Electrolux said the measures announced on Friday are “the next phase” of a manufacturing footprint program initiated in 2011 to improve cost competitiveness.
The shares fell as much as 6.3%, the biggest decline since Feb 1 and were down 6% to 162.4 kronor at 9.50am in the Swedish capital. The stock has lost 5% this year, giving the company a market value of 50 billion kronor.
Electrolux anticipates demand in Europe will decline by as much as 2% in 2013, it said today.
Source: Bangkok Post