December 8, 2008 / 8:51 AM / 11 years ago

UPDATE 1-SSAB to axe 1,300 jobs, cut $122 mln in costs

* Savings programme to be implemented next year

* Expectations on prices unchanged since Q3

* Programme to cost 550 mln SEK, impact mostly in Q4

* Shares up 6 pct

STOCKHOLM, Dec 8 (Reuters) - Swedish specialty steel maker SSAB (SSABa.ST) said on Monday it would cut 1,300 staff as part of a programme to save at least 1 billion Swedish crowns ($122 million) in annual costs.

The company, which last month warned that demand had dropped suddenly, said the programme would cost 550 million crowns, with much of the financial impact in the fourth quarter.

“As a consequence of the severe downturn in the steel market and the uncertain prospects for 2009, SSAB is undertaking a cost savings program that is estimated to reduce operating costs by at least 1 billion crown per year,” the company said.

“As part of the program, SSAB intends to reduce its workforce by 1,300. The savings program will be implemented in 2009 and the full impact is expected to be felt in 2010.”

SSAB Chief Executive Olof Faxander said the company had to adapt its costs to new conditions.

“We are doing this to strengthen SSAB’s future competitiveness and will continue to develop the company’s successful niche strategy,” Faxander said in a statement.

The job cuts span the firm’s divisions and subsidiaries.

“It is intended that the reduction will take place primarily through a reduction in the number of consultants and contractors and a reduction of approximately 1,100 employees in the group,” SSAB said.

It plans to cut 450 staff in its strip products division and 350 in the plate division. In North America, SSAB will cut some 140 contractors. SSAB’s Plannja unit will cut 120 jobs in Sweden and slightly more than 30 in Denmark.

The company’s 85 percent-owned wholesaler Tibnor will close operations in Malmo, southern Sweden, cutting 50 jobs. Another 100 jobs will go in the rest of the operations, SSAB said.

Editing by Erica Billingham

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