WHIRLPOOL, the owner of the Maytag and Amana appliance brands, is cutting about 1,000 salaried positions worldwide to reduce costs as slow US home sales limit demand.
The company has completed its first wave of layoffs of office staff and is planning to start another soon, chief financial officer Jim Peters said. Earlier this year, the company said it was cutting jobs without saying how many. Whirlpool employed 59,000 workers worldwide as at the end of 2023.
“The discretionary side that’s driven by existing home sales really has seen no pick-up and no benefit yet,” Peters said, referring to weak US demand. “We are simplifying our structure,” he added.
The Benton Harbor, Michigan-based company is trying to reduce expenses by about US$400 million this year, but that’s proving tougher than expected due to higher costs for labour, transportation and logistics. “We have seen inflation remain sticky,” Peters said.
Sales of large appliances in North America fell 8.1 per cent in the first quarter from a year earlier, Whirlpool announced on Wednesday (Apr 24). Revenue was US$4.49 billion in the period, a decline of 3.4 per cent and below analysts’ average estimate.
Low existing home sales in the US have eroded demand for new refrigerators and washers. But Whirlpool is seeing signs that Americans may be shifting to remodelling their homes in lieu buying new ones.
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“We are starting to see some positive signs” on remodelling, Peters said, adding that some property owners are using their home equity to fund renovations.
Whirlpool has cut back on discounts and promotions while turning to smaller countertop appliances such as KitchenAid stand mixers and battery-powered blenders to offset weak demand for large appliances. It’s also entering a new category by introducing fully automatic espresso makers. The company said these smaller items are more profitable. BLOOMBERG