SKF, the world’s biggest supplier of roller bearings, said this week that it will be cutting more jobs and bringing production down to ‘considerably lower’ levels over the third quarter of this year.
The group’s chief executive, Sune Carlsson, said that while the Asian market had improved slightly and demand in Europe had peaked in the second quarter, in North America it had declined further. ‘Over the next few quarters the overall demand for the group is likely to decrease further in terms of volume,’ he said.
The downbeat trading outlook came despite first-half figures which showed like-for-like pre-tax profit up 14% to Kr1.6bn (£106.3m), on sales rising 10.9% to Kr22.05bn (£1.45bn), although currency effects created much of the increase in sales.
Operating margins were down across all SKF activities except its service division, which has been a focus for growth over the past two years. In the first half of 2001, the operation recorded the highest external sales of any division, with Kr6.7bn, an increase of nearly 10%.
The group said it had cut 1,154 jobs over the first half of this year, and a reduction in staff numbers would continue.
Earlier this year, SKF signed a contract with IT giant EDS to transfer SKF’s internal IT services (along with 700 employees) to EDS. This is part of a wider outsourcing strategy aimed at cutting costs and reducing capital employed.
The company also acquired the Italian group Gamfior during the second quarter, a supplier of spindles and ball screws for the machine tool industry.