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â€œPeugeot Citroenâ€ to cut 6,800 jobs

27 October 2011 11:13 (UTC +04:00)

Baku - APA-Economics. French auto giant PSA Peugeot Citroen on Wednesday said it planned to slash thousands of jobs in Europe as part of an 800-million-euro cost-cutting plan amid a stagnating European car market, Bangkok Post reported.

Nearly 6,800 jobs among group employees and subcontractors are at risk.

The group announced to unions at a meeting Wednesday that 800 temporary positions would be cut by the end of the year, a union source said.

For 2012, the company said, another 1,000 manufacturing jobs would be cut through voluntary departures, up to 2,500 non-production positions would be eliminated and another 2,500 jobs were expected to be lost by ending outsourcing contracts.

The cost-cutting programme comes after the company announced that sales in its cars division fell 1.6 percent to 9.3 billion euros ($12.94 billion) in the third quarter. However, overall sales rose 3.5 percent to 13.45 billion euros.

"The competitive environment has become more challenging due to pricing pressure, which has intensified in Europe since September," the company said in a statement.

"In this tougher environment, recurrent operating income for the automotive division is now expected to be close to break-even for the full year," it said.

In a separate statement after the union meeting, PSA said the cuts "are designed to streamline the group’s organisational structures or to adjust project budgets, particularly in sales, marketing, information technology and research and development."

The company, France’s largest automaker and Europe’s second-largest after Germany’s Volkswagen, employs more than 205,000 people around the world, including 100,000 in France. It employs 167,000 people in total in Europe.

The new plan comes on top of a programme announced in 2009 that aims to save a total of 3.7 billion euros.

CGT union representative Bruno Lemerle slammed the plan as "scandalous."

"Logically when the results are good, the company should employ people, try to develop," Lemerle told AFP, pointing to the increased overall turnover figure.

"Our workload is excessive as it is, we don’t need a reduction in the workforce," he said.

With two huge manufacturers, PSA and Renault, France’s auto industry is key to the country’s economy and accounts for around 10 percent of the total national workforce.

PSA chief Philippe Varin met French Industry Minister Eric Besson after the announcement and insisted that the group’s manufacturing presence in France was not in question, the ministry said.