Husqvarna Group this week said it is planning measures to improve the group’s cost structure, including layoffs in several countries, including Sweden.
The proposed measures include a reduction of approximately 600 employees, with nearly half coming from Huskvarna in Sweden.
“I regret that we have to reduce the number of employees,” said Hans Linnarson, president and CEO of the Husqvarna Group. “The proposed measures aim to improve efficiency, reduce the fixed cost base and further increase flexibility. Even though we make reductions in Huskvarna, it will continue to be a very important unit to us.”
The cost-cutting measures will be implemented during the first six months of 2013 after negotiations with the respective unions. Cost savings will be achieved gradually and the company expects the full annual effect of around SEK 220 million (about U.S. $32.9 million) to be reached during 2014. For 2013, cost savings are estimated at around SEK 160 million (U.S. $23.9 million). Costs for implementing these measures are estimated at approximately SEK 250 million (U.S. $37.4 million), which will be charged to the operating income for the fourth quarter of 2012.
In addition, the company expects to achieve cost savings of SEK 50 million (U.S. $7.5 million) with its previously announced restructuring plans, which includes the relocation of manufacturing from Sweden to Poland, which began in 2010.
The Husqvarna Group is a leading producer of outdoor power products including chainsaws, trimmers, lawn mowers and garden tractors. Net sales in 2011 amounted to SEK 30 billion (U.S. $4.5 billion), and the average number of employees was approximately 15,700.
