STOCKHOLM, Sweden (AP) -- Swedish bearings maker SKF AB on Wednesday said it is slashing nearly 6 percent of its work force, or 2,500 jobs, worldwide to adapt to lower demand from the auto sector due to the global financial crisis.
The Goteborg-based company said it had already initiated the process which will affect 1,300 temporary workers and 1,200 ordinary workers. Most of the cuts will be made in Europe and the United States.
The group said it expects "a much lower demand in the fourth quarter," as the impact of the financial turmoil has widened to affect industrial sectors.
SKF's total sales volume in the quarter is expected to drop some 15 percent compared with last year, it said.
"The negative development within the automotive business has accelerated during the fourth quarter leading to significantly weaker demand than foreseen," SKF Chief Executive Tom Johnstone explained in the statement, noting it was increasingly hurt by clients both reducing production and extending their manufacturing shutdowns.
Johnstone told The Associated Press most of the job cuts would be made within its automotive unit in the U.S., France, Italy, Brazil, Argentina and Ukraine.
Besides the job cuts, the company will also cut overtime and reduce temporary staff and flexibility arrangements, he said.
The move is expected to cost around 470 million kronor ($58 million) in total, most of which will be charged in the fourth quarter. In terms of savings, it will boost the company by an estimated 250 million kronor a year when fully implemented by early 2010, it said.
Johnstone said he believed the measures would be enough for the time being, but added that the uncertainty of the sector prevented him from ruling out more cutbacks further down the road.
"We're using all of our weapons," he said, but "we cannot say going forward that we do not need to make additional steps."
SKF stock rose 2.6 percent to 70 kronor in early Stockholm trading.
The company has nearly 43,000 staff worldwide.