BENTON HARBOR (WWJ/AP) – Appliance maker Whirlpool Corp. said Friday it will cut 5,000 jobs, about 10 percent of its workforce in North America and Europe, as it faces soft demand and higher costs for materials.
Whirlpool also cut its 2011 earnings outlook drastically and reported third-quarter results that missed expectations, hurt by higher costs and a slowdown in emerging markets.
The company, whose brands include Maytag and KitchenAid, has been squeezed by soft demand since the recession and rising costs for materials such as steel and copper. The company has raised prices to combat higher costs, but demand for big-ticket items like refrigerators and washing machines remains tight.
The jobs to be cut are mostly in North America and Europe. They include 1,200 salaried positions and the closing of the company’s Fort Smith, Ark., plant — which has been building side by side refrigerators for 45 years.
The company expects the moves will save $400 million by the end of 2013.
Benton Harbor, Mich.-based Whirlpool’s third-quarter net income more than doubled to $177 million, or $2.27 per share, from $79 million, or $1.02 per share. Adjusted earnings of $2.35 per share fell short of analyst expectations for $2.73 per share.
Revenue rose 2 percent to $4.63 billion from $4.52 billion. Analysts expected $4.74 billion.
“Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs,” CEO Jeff Fettig said.
The company now expects 2011 net income will be $4.75 to $5.25 per share. Its prior guidance was net income would be at the low end of a range between $7.25 and $8.25 per share.
TM and © Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.