Electrolux, Europe's largest maker of kitchen appliances, today abandoned its full-year profit target and said it will cut more than 3,000 jobs after demand plunged in Europe and North America.
Operating profit at the maker of Frigidaire appliances totaled 2.7 billion kronor ($340 million) as of November, and the sudden drop in orders will make the minimum 3.3 billion-kronor goal impossible to reach, the Stockholm-based company said.
Electrolux fell as much as 7.4 per cent in the Swedish capital today. The company is the latest global appliance maker to announce jobcuts after the global credit crunch and U.S. housing slump clips demand.
Larger rival Whirlpool is eliminating 5,000 positions and the maker of KitchenAid gear on October 28th forecast lower annual profit.
The job cuts, equal to 5 per cent of Electrolux's workforce, and other measures will cost about 1.2 billion kronor. The expense will be booked in the fourth quarter. The company aims to save about 1.1 billion kronor, it said.
Electrolux has slid 31 per cent in the Swedish capital this year as new product rollouts cut into margins and consumers postponed new appliance purchases. Chief executive officer Hans Straaberg said last month that European price gains won't be enough to compensate for higher costs.
The company said it faces an unprofitable end to the year as demand for appliances in Europe and North America continued to show a sharp decline in December,