STOCKHOLM, Jan 14: Sweden’s SKF, the world’s biggest maker of industrial bearings, announced on Monday it was cutting 2,500 jobs and expanding and accelerating its cost cutting programme.

SKF, which launched a cost reduction programme in 2010, now aims to reduce annual costs by 3.0 billion kronor ($464 million) by the end of 2015, including 1.5bn for the years 2012 to 2015, it said. “This will impact some 2,500 people primarily through early retirement and other voluntary and agreed reductions,” SKF said in a statement.

SKF, which also makes sealants, is an important supplier to many parts of the industrial processing chain and is therefore regarded as a leading indicator of activity in manufacturing and machine tooling. It has reported a drop in net profits for four quarters running.

In the third quarter of 2012, it registered a net profit of 1.23bn kronor, down 23 per cent from a year earlier.

“Demand weakened as we went through the fourth quarter and we expect it to continue at this lower level at the beginning of this year,” chief executive Tom Johnstone said, adding that inventories were lowered by more than 600m kronor.

Johnstone said SKF would report restructuring costs of 200m kronor in the fourth quarter, as the first step of the programme and 100m kronor for impairments and write down of assets. The annual savings from the first step would be 150m kronor, and affect some 550 people primarily in Italy, Sweden, Ukraine and the US.—AFP