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Swedish ball-bearing giant slashes 2,500 jobs

The Local · 14 Jan 2013, 09:52

Published: 14 Jan 2013 09:52 GMT+01:00

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SKF launched a cost reduction programme in 2010 and now aims to reduce annual costs by 3.0 billion kronor ($464 million) by the end of 2015, including 1.5 billion for the years 2012 to 2015, it said.

"This will impact some 2,500 people primarily through early retirement and other voluntary and agreed reductions," SKF said in a statement.

The company's profits were down by a fifth last year.

SKF, which also makes sealants, is an important supplier to many parts of the industrial processing chain and is therefore regarded as a leading indicator of activity in manufacturing and machine tooling.

It has reported a drop in net profits for four quarters in a row. In the third quarter of 2012, it registered a net profit of 1.23 billion kronor, down 23 percent from a year earlier.

"We had a bad December, especially in the automobile market in Europe but also in North America and Asia," company spokeswoman Ingalill Östman told the business daily Dagens Industri.

"We expect it to continue at this lower level at the beginning of this year," chief executive Tom Johnstone said, adding that inventories were lowered by more than 600 million kronor.

Johnstone said SKF would report restructuring costs of 200 million kronor in the fourth quarter, as the first step of the programme and 100 million kronor for impairments and write-down of assets.

The annual savings from the first step would be 150 million kronor, and affect some 550 people primarily in Italy, Sweden, Ukraine and the United States.

Story continues below…

The fourth quarter report is due to be published on January 30th.

AFP/The Local/at

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Your comments about this article

10:35 January 14, 2013 by byke
Having to fire 2500 employees is going to take some balls.
12:06 January 14, 2013 by Rishonim
Management lost their bearings in this one and they need some heavy balls to sell it to the unions.
12:48 January 14, 2013 by skogsbo
once one has gone though, that will grease the wheels, and they'll be rolling out the door.

Hopefully most of these jobs can go through a leaning process, but if hard times continue, then they'll be no slack and it will be much tougher on the work force.
18:51 January 14, 2013 by Bilal Ajmal Khan
It is just too expensive to keep an emlpoyee in Sweden and companies will continue facing issues on how to manage their variable costs.
11:40 January 20, 2013 by matonbass
correct, i agree entirely. the unions can do nothing. they don't own SKF. and reme mber what has recently happened with SAS. nice healthy wage reductions. LoL . Swedish working people have to face up to the realization that they are overpaid.
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