Electrolux cuts 2,800 jobs

December 14, 2001 Posted: 0830 GMT

LONDON (CNN) -- Electrolux, the world's biggest maker of powered household appliances, plans to shed 2,800 jobs to save money.

The Swedish company, which makes washing machines, cookers and lawnmovers under the Zanussi, AEG and Flymo brands, said it was setting aside about 1.5 billion Swedish crowns ($144 million) to cover severance payments.

About 40 percent of the provisions would be used to write-down the value of assets other non-cash related costs, the company said. It expects to save an estimated 40 million crowns in 2001, 460 million crowns in 2002 and about 940 million crowns annually after 2003.

"The measures we have announced are aimed at reducing costs as well as addressing loss-making units and non-performing assets," said Chief Executive Michael Treschow. 

The company also announced plans to close two plants in Europe, one in Asia, and relocate one European plant and reduce manufacturing personnel in Latin America.

Appliance makers are especially susceptible to economic conditions where consumers are reluctant to splash out on big items. An economic recession in the U.S., the world's biggest consumer market, has taken a big bite out of earnings for many in the sector.

Electrolux said earlier this year sales growth suffered as slowing U.S. demand left retailers with substantial inventories.

The company announced 2,000 job losses in February and 2,100 in October, taking this years total to 6,900. Electrolux, which had sales of 124.5 billion crowns last year, employed about 87,000 people in 2000.