ELECTROLUX said yesterday it would double the size of planned cost-cuts as the world number two home appliance maker tries to offset the effects of the global slowdown and rising raw materials prices.
Electrolux faces shrinking demand in its mature markets in North America and Europe as consumers, worried about their finances, cut back on big ticket items such as fridges.
The firm also expects raw materials prices to keep on rising in 2012, though at a slower pace than in 2011.
As a result, Electrolux said it now aimed to slash 5.1bn crowns (£482m) from its cost base over the next few years through restructuring its manufacturing operations, cutting jobs and other efficiency measures.
Electrolux, setting the new savings measures just a year after a last round of cuts was announced, said its expanded efficiency programme would reduce annual costs by an additional 2.6bn crowns.
“Electrolux has been tangibly affected by the decline in consumer confidence in the mature markets,” the company said in a statement. “At the same time increased costs for raw materials have had a negative impact on earnings.”
In October, Electrolux gave a bleak picture of its market, saying demand would fall by one per cent in western Europe and between four and five per cent in North America this year.
Electolux’s Stockholm-listed shares tumbled 6.3 per cent yesterday.
City A.M. Reporter