Saab Cuts Defense Electronics Jobs Amid Military Sales SlowdownRobert Wall
Saab AB, the Swedish maker of Gripen fighter jets, said it will try to shift as many as 175 employees from its defense-electronics unit to other positions in the face of lower military spending.
Saab will reduce defense-electronics staffing at its Gothenburg facility by 150 to 175 employees, or around 15 percent of the unit’s total, the Stockholm-based company said in a statement today.
“The measures being presented today within Business area Electronic Defence Systems are crucial in order to ensure that Saab will achieve its long term targets,” it said.
The company cut its 2013 profitability forecast in July, saying sales won’t grow and that earnings before interest and taxes, excluding one-time items, will decline to about 6.6 percent of revenue. The defense-electronics and missile-making Dynamics units were particularly hurt by the slowdown.
“Reduced business volumes have resulted in under-utilization of resources and staff,” Micael Johansson, head of the defense-electronics unit said in the statement. “We must constantly adapt our business to ensure that we stay competitive.”
Saab shares were up 0.2 percent at 3:15 p.m. in Stockholm, valuing the company at 14.4 billion kronor ($2.3 billion). The stock has declined 2.2 percent this year.
Saab will end the sale of some products to adjust to the more austere sales environment as it targets 500 million kronor in earnings improvements in coming years, it said in July. Affected Staff will be urged to take up other positions in the company or, if they choose to leave, will benefit from company support initiatives, it said today. The reductions should be completed by April, spokeswoman Helene Lindstrand said by phone.
It is too early to say what businesses the employees may be moved into, she said, with discussions only now starting. The costs, which she would not disclose, are not material, Lindstrand said.