Electrolux has cut workers in North America, including some in Charlotte, as the Swedish appliance-maker seeks to boost its earnings and looks ahead to the completion of a major acquisition.
The Stockholm-based company cut less than 1 percent of its North American workforce of 12,000, spokeswoman Eloise Hale said Friday. Hale wouldn’t give an exact number of jobs cut or say how many were lost in Charlotte. She said the cuts were related to improving the company’s financial performance.
Electrolux’s North American headquarters is in the University City area.
The layoffs follow the April resignation of Jack Truong, the Charlotte-based CEO of the company’s North American division. The cuts also come as the company awaits regulatory approvals needed to close its $3.3 billion deal to buy General Electric’s Louisville, Ky.-based home appliance business.
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Electrolux employs about 925 people locally and said in 2013 that it expects to increase the number to 1,600 by the end of 2017 as part of an expansion of its Charlotte facilities. But Hale said Friday the company is evaluating those plans until after Electrolux completes its GE purchase, which is expected later this year.
Hale said the $85 million Electrolux expansion in Charlotte was planned to be a research and development facility. But GE has extensive R&D facilities in Louisville, and Hale said the combined company needs to determine where employees will be located after the acquisition before it finalizes its expansion plans.
“We won’t know more until after we receive regulatory approval and close the deal,” she said.
David McGregor, an analyst with Longbow Research, said it’s not surprising that Electrolux is evaluating its plans.
“They’ve got to decide where redundancies occur, what stays and what goes,” McGregor said. “Furthermore, they want to see what they’re getting with the acquisition.”
Electrolux’s North American business, which reported a loss in the first quarter, is also under pressure to improve its performance. It’s faced increased costs from new federal energy standards for its refrigerators and freezers and from the ramp-up of a new cooking appliance plant in Memphis, Tenn.
After Troung’s resignation, Electrolux CEO Keith McLoughlin told the Observer that the move was tied to “restoring business results.” The company has not yet named Truong’s replacement.
In the April interview with the Observer, McLoughlin reaffirmed the company’s commitment to Charlotte after the GE deal, but he said it was too soon to say how the deal will affect the overall employee count.
Electrolux is the second-largest appliance manufacturer, behind Whirlpool, and its Charlotte-based North American operations are a major source of the company’s revenue.
The appliance-maker moved its North American headquarters to Charlotte from Augusta, Ga., in 2010, lured partially by a $27 million incentives package. In 2013, Electrolux announced an $85 million expansion of its facilities in the University City area, supported by $34 million in state and local incentives.
The bulk of the incentives for the expansion come from a state Job Development Investment Grant that would provide the company up to $27.4 million over 12 years. Annual grants to the company are based on state certification of job creation and capital investment requirements.
Employees impacted by layoffs are eligible to apply for other roles in the company, Hale, the Electrolux spokeswoman, said. Those who lose jobs will be eligible for severance pay, outplacement services and employee assistance programs.
“The company announced a tough but necessary action to eliminate less than 1 percent of roles across our North American operations,” Hale said. “Like all public companies, we are focused on operational and financial efficiency, and on ensuring profitable growth.”