By Dominic Chopping
STOCKHOLM–Electrolux AB said Friday that the group-wide cost reduction and North America turnaround program it launched during the quarter aims to cut over 7 billion Swedish kronor (638.1 million) in costs, with 3,500-4,000 jobs affected.
The Swedish home-appliance manufacturer said last month it was launching a program as demand in Europe and the U.S. fell sharply.
The program is expected to boost year-on-year earnings by SEK4 billion-SEK5 billion in 2023 while a restructuring charge in the fourth quarter of 2022 is seen at SEK1.2 billion-SEK1.5 billion, it said.
“We are also reviewing our production capacity needs given current market situation,” Chief Executive Jonas Samuelson said.
Electrolux posted a third-quarter net loss of SEK605 million compared with a profit of SEK1.14 billion a year earlier.
Sales rose 14% to SEK35.24 billion as price increases helped offset lower volumes.
Analysts polled by FactSet had expected a net loss of SEK14 million on sales of SEK32.52 billion.
Electrolux backed its full-year market outlook and now forecasts a hit from raw-material costs, trade tariffs, currency and labor cost inflation this year of SEK8 billion-SEK9 billion, from SEK8 billion-SEK10 billion.
The company expects 2023 shipments of core appliances to be negative year-on-year in Europe and North America.
Write to Dominic Chopping at [email protected]