Trelleborg, Sweden – Trelleborg AB is set to initiate cost cutting measures, which will involve “targeted personnel reductions”, in response to declining demand.
By not fulfilling vacancies, reviewing the need of temporary employees and terminating permanent contracts, the company expects to reduce the number of employees by some 700 people, company spokeswoman Karin Larsson said in a written statement to ERJ 22 July.
The newly-announced decision will mainly affect Trelleborg Wheel Systems and Trelleborg Industrial Solutions, according to Larsson.
“We need to internally review our set up and have the necessary discussions with unions. So, we believe the majority of the workforce will leave Trelleborg during 2020,” the Trelleborg official added.
In its quarterly financial statement 18 July, Trelleborg noted a “trend shifted” during the second quarter of 2019, as a downturn in June reversed the improvements observed in May and April.
Intensified political tension and escalated global trade conflicts, said CEO and president Peter Nilsson, are impacting market sentiment across different sectors, making it difficult to forecast the near future.
Trelleborg, he added, expects to see “increasing differences” in development between various market segments.
Despite predictions of a stable overall demand, Trelleborg anticipates a “disadvantageous sales mix” with possible negative impact on its earnings in the next quarter.
To address an expected decline in demand in parts of the group, Nilsson said the company had taken “a proactive approach” at the end of the quarter and initiated measures to reduce costs.
The initiatives will generate nonrecurring costs of approximately SEK 500 million (€47.4 million), according to Nilsson.