SKF cutting 2,500 jobs worldwide

Swedish bearings maker SKF AB said it is cutting production and eliminating 2,500 jobs worldwide, or 6 per cent of its global workforce, 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 affect 1,300 temporary workers and 1,200 ordinary workers. Most of the cuts will be made in Europe and the United States.
 
''The automotive segments have continued to rapidly fall and a negative trend is now also seen for the industrial segments leading to a much lower total demand for the group in the fourth quarter. SKF has initiated a number of actions involving a reduction of the workforce by around 2,500 people globally,'' SKF said in a press release.
 
SKF also presented a negative outlook for the fourth quarter expecting slightly lower total demand for the group. ''The negative development within the automotive business has accelerated during the fourth quarter leading to significantly weaker demand than foreseen. Many customers have reduced production and are taking an extended shutdown period in December and January,'' the release said.

SKF said demand from industrial OEM and aftermarket has declined from last year while the segments like railways, aerospace and energy continue to develop well, although at a lower pace.

The company has already started cutting production and adapt to the lower demand level.  SKF expects total estimated volume decrease for the group for the fourth quarter to be around 15 per cent. It expects operating profit for the fourth quarter, before restructuring and impairments, to be around SEK 1,600 million ($200 million) to SEK 1,700 million ($215 million), based on current assumptions.