Swedish ball bearing giant SKF AB today said it will slash around 400 jobs in Germany as part of cost cutting measures due to weakening business sentiment in India, China and European countries.
The company with annual sales of 66.21 billion Swedish kronor (USD 9.38 billion) is expecting a lower demand for its products and services in the second quarter compared to the year ago period.
SKF, which employs more than 46,000 employees worldwide, would be taking steps to reduce its workforce through the introduction of voluntary early retirement and redundancy schemes in an attempt to save costs.
"... These schemes are underway and are expected to result in a reduction of around 400 people with annual savings of around 170 million Swedish kronor when fully implemented in 2016," the company said in a statement.
SKF would achieve a saving of 120 million Swedish kronor (USD 17 million) by 2013. It is is expecting to save a total of 170 million Swedish kronor (USD 24 million) by 2016.
The company had witnessed some improvement in Asian sales through the first quarter but in the second quarter it is facing a declining business in India along with China.
"In Asia, we saw some improvement in our sales as we went through the first quarter and into the second quarter. However, the demand in Asia, primarily China, needed to continue to improve and this has not happened yet.
"In India we have seen some weakening in our business, which is also broad-based reflecting the weak sentiment. Overall, I see a more uncertain demand situation at present globally, but based on what has been happening in the second quarter, this is not a surprise," SKF President and CEO Tom Johnston said.
He further said, "We are seeing a weaker development in our sales in Western Europe and Asia than we expected entering the quarter...I think that the demand reflects what is happening in the financial markets and a general lack of confidence."
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