GM, Ford Supplier To Slash 8,000 Jobs In Cost-Cutting Efforts

Automotive safety supplier Autoliv Inc ALV said on Thursday that it will reduce both its direct and indirect workforce by about 11% in an attempt to cut costs.

What Happened: Under the cost-cutting initiative, the company will cut about 6,000 direct positions and 2,000 indirect positions. About 1,000 indirect positions will be reduced solely in Europe wherein the company intends to close several sites.

The first headcount reductions will occur in 2023, the company said in a statement, while adding that the initiative will be completed by 2025.

“The headcount reduction will affect people based in our offices, technical centers, and plants, including leadership positions at all levels," said CEO Mikael Bratt.

"It is too early to say who will be affected and where," a company spokesperson told Benzinga while adding that the measures will be decided in compliance with local regulations.

Why It Matters: Meanwhile, the company is continuing to negotiate with customers, which includes automakers Ford Motors, Volkswagen and General Motors, among other, on price increases.

"We work intensely with customers to secure price increases, and we will not stop until we have received full and fair compensation to ensure that inflationary pressures are effectively pushed through the value chain," Bratt said. The discussions are going according to plan, the spokesperson said without elaborating.

In the first quarter, Autoliv reported sales growth of 17% year-on-year to $2.49 billion, beating the consensus of $2.31 billion. The company sees an 8.5-9.0% adjusted operating margin and operating cash flow of around $900 million for 2023.

Price Action: ALV shares closed up 1.16% at $88.11 on Wednesday, according to data from Benzinga Pro.

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