Whirlpool Corporation, which owns the Maytag and Amana appliance brands, is reducing its workforce to address the stagnant demand in the US housing market. The company is set to lay off around 1,000 salaried positions globally, following an initial round of cuts in March, with another wave soon, Chief Financial Officer Jim Peters said in an interview. According to Jim Peters, the company is targeting cost savings of up to USD 400 million this year through the implementation of the workforce reduction initiative.
The home appliance manufacturer noted robust performance in the first quarter from Latin America, Asia, and SDA Global, attributed to share gains and cost efficiencies. However, this was counterbalanced by a challenging macroeconomic environment in North America. This came in reportedly due to-
Declining US home sales are reducing demand for new appliances.
Homeowners are increasingly opting for remodels instead of moving.
The slowdown in US home sales has significantly impacted Whirlpool's appliance sales, necessitating these measures. In the first quarter, Whirlpool reported a 3.4% decline in net sales, down to USD 4.49 billion. Despite this, the company's stock price saw a slight increase of 1.7% in after-hours trading, suggesting investor confidence in the long-term benefits of the cost-reduction strategy.
Jim Peters said during 2024, the company showed its commitment to its capital allocation priorities. Peters also informed that the company had launched several new products, declared very strong dividends in Q1 and Q2, and repaid USD 500 million in maturing term loans. At the end of 2023, Whirlpool had approximately 59,000 employees globally, making these layoffs a significant but targeted reduction.