White goods giant Electrolux has announced a plan to streamline its business, globally, which will include outsourcing parts of its current manufacturing and create around 1,600 redundancies.

The company is set to spin off its Professional Products business as a separate company, create four regionally focused business areas and reorganise key global functions.

It is anticipated this will impact 875 non-production positions, globally, which will offset increased ongoing costs related to the separation of Professional Products.

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In addition, Electrolux has decided to outsource production of vacuum cleaners from its Jaszbereby facility and a “significant part” of its freestanding refrigerators currently produced there.

According to the company, it will impact approximately 800 production employees.

However, Electrolux is also carrying out a manufacturing investment totalling SEK8billion over four to five years.

Around €100million have been earmarked to spend on  “automation, digitisation and innovation capabilities” in its production of high-end refrigerators in Nyiregyhaza, Hungary.

According to Electrolux, the measures are expected to generate annual saving of about SEK500million, with full effect from 2022.

It means the total annual cost-saving from ongoing efficiency activities and investments are projected to be approximately SEK3.5nillion, will full effect from 2024.

The restructuring changes of approximately SEK1.6billion  will be reported as non-recurring items in the results for the third quarter of 2019.