Bloomberg reports that Electrolux will cut close to 1,700 jobs and take a charge of 1.6 billion Swedish kronor ($164 million, we'd give it in £ but that's a guess these days with Brexit) to reduce spending as the appliance maker battles increased raw material and tariff costs.
The job losses will be made up from about 875 white-collar jobs, and about 800 staff at the company’s factory in Jaszbereny, Hungary. 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, roughly about half a million US dollars.
Electrolux now aims to save a total of 3.5 billion kronor through cost cuts and rejigging its manufacturing, including the shutdown of a cooking-product plant in Memphis, Tennessee.
Electrolux 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.