SKF AB (Sweden; Stockholm: SKFA) has been laying off staff at manufacturing facilities worldwide, starting with temporary and contract workers. That action has now accelerated, with the announcement that at least 2,500 more, or 6% of its worldwide total, will be laid off this month.

1,200 jobs will be cut from operations outside Sweden, along with 1,300 contract and temporary workers. At least 2,400 indirect staff, primarily in Europe, are on short-hour weeks. Some plants will go on extended shutdown -- such as the automotive bearing plant in Pune which will be closed for ten days in late December. Other plants are operating on reduced hours. And overtime has generally been eliminated across the organization.

SKF said the 1,200 direct positions eliminated will primarily be from automotive in the U.S., France, Italy, Ukraine, Brazil, and Argentina.

Behind these actions are SKF's latest projections that fourth quarter sales will fall by at least 15% from 2007 levels. Third quarter had actually seen a 6% year-on-year increase. And in fact the company's shares were up on this latest news, as analysts were projecting sales would decline more than 15%.

Approximately 100 have been let go from U.S. facilities, in addition to approximately 150 jobs lost when the company shifts automotive seal production from Elgin, Illinois to other plants.

article: SKF moves automotive seals from Elgin
So far, layoffs are concentrated in contract and temporary workers, and in automotive-related areas. Analysts generally expect SKF's automotive-related sales to tumble 30% or more in fourth quarter. However, a few other markets, such as aerospace/aviation, rail, and energy-related, are less impacted and will not see significant job cuts.