UPDATE 1-Bang & Olufsen says to cut jobs, shares rise

Tue Oct 21, 2008 4:20am EDT

Related Topics

* Bang & Olufsen to cut 300 positions or about 165 staff

* Measures to save 160 mln Danish crowns

* To open more shops in growth markets

(Adds details, background, analyst)

COPENHAGEN, Oct 21 (Reuters) - Danish luxury stereo and television maker Bang & Olufsen A/S BOb.CO plans to cut about 300 posts, trimming costs by about 160 million crowns ($28.9 million) as part of a new strategy.

The group said on Tuesday it would also concentrate on fewer product categories, primarily audio and video, but planned to open more shops in growth markets such as Russia and China.

By 0800 GMT, Bang & Olufsen shares were 7.1 percent higher at 150 crowns, outperforming the Copenhagen bourse's broad OMX index .OMXCPI, which was 2.3 percent up.

The maker of sleek, upmarket audio equipment said it would build one common digital platform as its future technological foundation for all products.

"It's the right way," said Alm Brand analyst Stephen Rammer. "They have to get more critical mass in the things they produce. That will be totally decisive."

As part of the cost reductions, Bang & Olufsen said it was cutting about 300 posts and would make 165 employees redundant.

"The purpose is to adjust the cost level to the group's new and lower turnover level of recent months," it said.

B&O, whose high-end TVs can cost more than $30,000, has been hit hard by the global economic downturn and fired its chief executive in January. Earlier this month, it said it had swung to a loss in its first quarter as sales fell in its largest markets.

Its shares are down by about 70 percent so far this year. (Editing by Erica Billingham and David Holmes)

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