After reporting poor earnings for the third quarter, the Swedish group said on Friday that it would be initiating a reorganization exercise that would result in the elimination of 4,000 employees.
Electrolux, a Swedish company that makes appliances for the home, is not doing very well. In addition to this, it intends to raise the standard by eliminating anywhere from 4,000 to 8% of its current employees. Price hikes, on the other hand, were mostly responsible for the company's announcement on Friday that it had seen a substantial increase in its revenue of +14% in the third quarter, to 35.24 billion Swedish crowns (3.2 billion euros). Despite this, he disclosed a total loss of 605 million Swedish crowns (55.3 million euros). The cause for this is the lackluster demand for its products on a global scale, which is a direct result of the persistent challenges associated with supply.
According to Jonas Samuelson, CEO of Electrolux, “the impact of sluggish customer demand has been magnified by high inventory levels at retailers.” This was explained in the previous sentence. And the retreat from Russia, which took place after the conflict in Ukraine and resulted in a provision of 350 million crowns, was not helpful. The Swedish organization is experiencing most of its challenges in North America. In recent years, the company has made significant investments in it; nevertheless, the widespread Covid-19 epidemic as well as shortages of parts have slowed the ramp-up of manufacturing. Only during the company's third fiscal quarter did Electrolux report a loss of 1.2 billion Swedish crowns. Because of this, the company has concluded that it must initiate an aggressive cost-cutting initiative, which will result in the elimination of thousands of jobs. According to Electrolux, the majority of cost reductions will be accomplished in the business unit that is responsible for operations in North America.
Because of this plan, there would be an additional charge to the accounts in the amount of 1.5 billion crowns for the fourth quarter. The shareholders anticipated dismal outcomes, but they did not anticipate the scale of those results. On the Stockholm Stock Exchange, the stock had a decline of over 6%.