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Electrolux to pare 2,000
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February 9, 2001: 7:55 a.m. ET
Swedish appliance firm trims staff as key U.S. market looks chilly in 2001
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LONDON (CNN) - Electrolux plans to eliminate up to 2,000 jobs in Europe and North America, the Swedish maker of refrigerators and chainsaws said on Friday.
President and chief executive Michael Treschow, speaking on CNN, announced the planned cuts after Europe's biggest consumer appliance maker announced comparable profits rose 10 percent in 2000.
"Unfortunately, there will be a number of job positions that will be reduced, totalling about 2,000 jobs in Europe and North America," he said. Electrolux had an average of about 87,000 employees in 2000. 
Appliance makers are especially susceptible to economic conditions, and slowing growth rates in the U.S. economy – the world's biggest consumer – took a bite out of earnings for many in the sector late last year.
The news of the staff reductions came as the consumer appliance maker reported that pretax profit before one-off items rose to 6.98 billion crowns ($722 million) in 2000, up from 6.36 billion crowns a year earlier.
Analysts had expected that figure to come in at 7.06 billion crowns, according to a Reuters poll. Sales rose 4 percent to 124.5 billion crowns.
For the fourth quarter alone, Electrolux reported income after financial items fell 39 percent from a year earlier to 955 million crowns. Sales rose 3.6 percent to 29.4 billion crowns in the last quarter of 2000.
"This was a nice set of results. The performance in the fourth quarter is comforting in comparison to recent numbers in its peer group – Whirlpool and Maytag," Peter Lawrence, an analyst with Lehman Brothers, who has a "buy" rating on Electrolux, told CNN.com.
Late last month, Whirlpool reported its fourth-quarter 2000 earnings tumbled 41 percent from a year earlier, while Maytag reported fourth-quarter earnings tumbled 55 percent, falling short of analysts' expectations.
Electrolux shares were up 6.4 percent to 149.50 crowns in early afternoon trade in Stockholm on Friday. 
The maker of vacuum cleaners, refrigerators, chainsaws and lawn mowers said it's generally upbeat about 2001, but added conditions are difficult to predict in light of a slowdown in the U.S. market late last year.
"There are a number of question marks going forward – and it really boils down to what happens in the U.S.," said Treschow. "We have a number of contingency plans."
The U.S. market accounted for just under 39 percent of Electrolux's sales last year, with Europe accounting for about 50 percent.
Electrolux has been in the midst of a shake-up of its administrative ranks, aiming for a more pan-European – rather than country-specific – structure. 
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