Electrolux AB will cut almost 1700 jobs and take a charge of 1.6 billion Swedish kronor ($164 million) to reduce spending as the Swedish household-appliance maker battles increased raw material and tariff costs.
The redundancies will affect about 875 white-collar jobs, and about 800 staff at the company’s factory in Jaszbereny, Hungary, the Stockholm-based company said in a statement on Tuesday. The positions will be eliminated as Electrolux invests in automation and outsources production of vacuum cleaners from the plant.
The measures are intended to generate annual savings of about 500 million kronor from 2022. The shares rose 0.9% as of 11:56 a.m. in Stockholm.
Electrolux now aims to save a total of 3.5 billion kronor through cost cuts and revamping manufacturing, including the shutdown of a cooking-product plant in Memphis, Tennessee. The Swedish company has seen costs increase as steel prices rise and components imported from China come with extra import duties. Electrolux said in July that it expects a negative impact of as much as 1.6 billion kronor from raw materials, trade tariffs and currency exchange movements this year.
The recovery of overpaid taxes in Brazil will offset a large part of the 1.6 billion-krona charge, and Electrolux expects the net effect of non-recurring items to be 400 million krona in the third quarter, it said in a separate statement.
The job cuts announced Tuesday represent about 3% of the company’s global staff. Bloomberg