STOCKHOLM (AP) — Swedish appliance maker Electrolux AB plans to cut costs by around 5.1 billion kronor ($770 million) a year and review staffing levels in all regions because of a broad downturn in demand.
Electrolux said Tuesday it has been "tangibly affected" by a decline in consumer confidence in Europe and North America, while increased costs for raw materials have also weighed on earnings.
The company forecast 2011 sales volumes of household appliances in North America to be 25 percent below the peak year of 2005 and sales volumes in Western Europe to be 15 percent below the peak year there of 2006.
It said it expects the headwinds to continue in 2012.
Shares in Electrolux dropped by 7.9 percent to 111.4 kronor ($16.8) in early Stockholm trading.
The company, which makes washing machines, dryers, refrigerators and vacuum cleaners, last year had some 52,000 employees and reported total sales of 106 billion kronor ($16 billion).
The savings plan is estimated to provide 2.6 billion kronor ($390 million) more in savings than Electrolux's previous plan, the company said.
Measures include adapting manufacturing capacity to save 1.6 billion kronor ($240 million) a year by 2016 and reviewing employment levels to save 500 million ($75 million). The company said it has started netotiations with unions but didn't immediately want to say how many workers it might lay off.
Another measure involves speeding up synergy savings and improving purchasing to save 3 billion kronor ($450 million) as of 2015.
Together, all the measures are expected to cost 5 billion kronor ($750 million), Electrolux said.