Swedish bearings maker SKF said Friday it will cut a net 1,200 jobs, primarily staff positions in Europe, as part of a plan to improve the competitiveness of its industrial business.
The company said the move, which involves a gross reduction of 1,700 positions, is enabled by the ongoing separation of its automotive business.
SKF expects the rightsizing to generate annual savings of approximately 2 billion Swedish kronor by 2027, with a restructuring charge of 2 billion Swedish kronor taken in the second quarter.
“These actions are difficult to take, but necessary to secure our future competitiveness,” President and CEO Rickard Gustafson said in a statement.
The announcement came as SKF reported that its second-quarter adjusted operating margin rose to 13.3% from 13.0% a year earlier, even as net sales fell to 23.17 billion Swedish kronor from 25.61 billion.
The company said its industrial business saw organic sales growth, while its automotive unit faced challenging market conditions and a sales decline.
Looking ahead, SKF said it expects organic sales in the third quarter to be relatively unchanged compared with the same period last year.
More from this issuer
Related coverage
Swedish bearings maker SKF on Tuesday detailed its strategy to separate its industrial and automotive businesses, a move that will involve restructuring and separation charges totaling 6.5 billion Swedish kronor.
Swedish bearings maker SKF said Wednesday that costs related to the planned spin-off of its automotive business hit its third-quarter cash flow.