Electrolux's Strategic Shift: Layoffs, Closures, and New Partnerships

Electrolux is planning to lay off 1,700 employees in Italy, marking more than 40% of its workforce in the country, and close one of its plants there. The Swedish appliance maker is reallocating its focus on premium categories amid weak consumer demand and heightened competition.

Electrolux is set to lay off 1,700 of its Italian employees, representing over 40% of its workforce in the country, as confirmed by Italian trade unions on Monday.

The Swedish appliance manufacturer is facing challenges due to subdued consumer demand and competitive pressure from cost-effective rivals, which have led to its shares plummeting by 75% from their 2021 peak. Consequently, Electrolux is adjusting its strategy by reducing costs and concentrating on premium products to enhance profitability.

The company plans to shut its kitchen hood facility in Cerreto d'Esi, near Ancona, and cut staff across all its Italian plants, according to Italy's UILM, FIM, and FIOM unions. Following discussions with company executives in Venice, union representative Gianluca Ficco emphasized the dire European market conditions, increased production costs, and intensified rivalry from Asian manufacturers. A strike has been called, urging government intervention, as Italy's industry ministry pledged to closely observe and maintain dialogue with both the company and unions.