Well-known home appliance manufacturer closes factory, 650 people left jobless

(Patria) - Swedish home appliance manufacturer Electrolux has decided to shut down production at its factory in Nyiregyhaza, Hungary, at the beginning of 2024 due to expected weaker demand during a period of high inflation and rising interest rates.

The factory in Nyíregyháza produces refrigerators and employs around 650 workers.

The company announced that due to the closure of production in Hungary, it will book restructuring costs of around SEK 550 million (EUR 48.5 million) in the first quarter.

They pointed out that they expect a lower sales volume this year due to weaker consumer sentiment, adding that they may not be able to fully pass on higher energy and labor costs to customers.

According to their assessment, demand should weaken in Europe, North and Latin America this year, while it should remain stable in the Asia-Pacific region, the Middle East, and Africa.

- We expect that consumer sentiment in 2023 will also be negatively affected by high inflation and interest rates, but with differences between regions.

It will be difficult for us to fully compensate for the expected negative impact of external factors throughout 2023 on group-level prices - said CEO Jonas Samuelson.

On January 11, Electrolux warned that due to continuously high costs and weak demand, especially in North America, it expects an operating loss in the fourth quarter of around SEK 2 billion and a drop in organic revenue by eight percent.

On Thursday, they reported that in the last three months of last year, they operated with an operating loss of SEK 1.96 billion (USD 190.3 million), highlighting restructuring costs of SEK 1.5 billion, Hina reports.

In the same period in 2021, they recorded an operating profit of SEK 882 million.