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Charlotte unaffected by Electrolux plan to cut US jobs in small appliance unit

Electrolux Chief Executive Officer Keith McLoughlin speaks at Capital Markets Day in Charlotte in November 2014.
Electrolux Chief Executive Officer Keith McLoughlin speaks at Capital Markets Day in Charlotte in November 2014. Charlotte Observer

Swedish appliance maker Electrolux will lay off U.S. employees in its small appliances unit, though the move won’t affect jobs in Charlotte, where the manufacturer employs about 900 at its North American headquarters in the University City area.

Electrolux said the layoffs are part of an effort to improve profitability in the division. Spokeswoman Eloise Hale added that they are “absolutely unrelated” to the company’s news Monday that it will not acquire General Electric’s appliance division.

Because that deal fell apart, Electrolux said Wednesday it has paid GE a termination fee of $175 million.

Electrolux said it plans to “structurally reduce costs” within its small appliance division because operations continue to lag due to lower volumes in certain markets as well as “unfavorable currency movements.”

“Like all public companies, we are focused on operational and financial efficiency and on ensuring profitable growth,” Hale told the Observer. The layoffs are part of a plan mentioned in the company’s third quarter earnings in October, she added.

Staff reductions and downsizing of activities will take places mainly in the U.S., Sweden and China. Electrolux said it has already started consultations with Swedish unions.

Hale said the company isn’t disclosing where in the U.S. layoffs will take place nor how many there will be in total, but they amount to a “very small number.”

“Once the program is completed, small appliances will have financial flexibility to continue to invest in profitable product categories,” Electrolux said in a statement.

The cost reductions are expected to be complete in 2016 and will amount to annual cost savings of 120 million kroner, or about $14.2 million.

Earlier this week, GE said it was calling off the $3.3 billion sale of its appliance unit to Electrolux, which the Justice Department tried to block for antitrust reasons. The deal would have made Electrolux surpass Whirlpool as the world’s largest appliance maker.

Katherine Peralta: 704-358-5079, @katieperalta

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