Sweden's SKF to lay off 2,500 workers globally
Workers in Ukraine would be affected most
Swedish bearings maker SKF AB on Wednesday said it is slashing nearly 2,500 jobs from its global work force in a move to adapt to lower demand from the auto sector due to the global financial crisis.
The Goteborg-based company said it had already initiated the process which will reduce its staff by 6 percent. Most of the cuts will be made in Europe and the United States.
The group said it expects "a much lower demand in the fourth quarter," as the impact of the financial turmoil has widened to affect industrial sectors.
SKF`s total sales volume in the quarter is expected to drop some 15 percent compared with last year, it said.
"The negative development within the automotive business has accelerated during the fourth quarter leading to significantly weaker demand than foreseen," SKF Chief Executive Tom Johnstone explained in the statement, noting it was increasingly hurt by clients both reducing production and extending their manufacturing shutdowns.
The move is expected to cost around 470 million kronor ($58 million) in total, most of which will be charged in the fourth quarter. In terms of savings, it will boost the company by an estimated 250 million kronor a year when fully implemented by early 2010, it said.
Company officials were not immediately available for comment, but SKF spokeswoman Ingalill Ostman told Swedish news agency TT that workers in the U.S., France, Italy and Ukraine would be affected most by the cuts. No reductions would be made in Sweden, she said.
"The explanation is that Sweden is a relatively small supplier to the automotive industry and that is where we see this tough market development," said Ostman, the spokeswoman.
Besides the job cuts, the company will also cut overtime and reduce temporary staff and flexibility arrangements, the company said.
SKF stock rose 2.6 percent to 70 kronor in early Stockholm trading.
The company has nearly 43,000 staff worldwide.