Page last updated at 11:51 GMT, Thursday, 20 November 2008

Peugeot Citroen cuts 2,700 jobs

Peugeot Citroen has been hard hit by the automotive slowdown

French car company Peugeot Citroen has announced plans to shed 2,700 jobs because of falling demand in Europe.

It predicts sales volumes will fall by at least 10% in 2009, following a 17% drop in the last quarter of this year.

The company said the job cuts would affect assembly-line workers, managers and office staff.

In October this year, Peugeot Citroen cut its profit forecast for 2008 and started "massive" production cuts in the wake of a global downturn.

The carmaker also plans to move 900 workers from its French factory in Rennes to other sites, under a plan which is to be presented to its works council on 2 December.

Peugeot Citroen human resources director Jean-Luc Vergne said urgent action was needed in order to protect the future of 200,000 employees.

The group's sales fell 5.2% in the third quarter.

Gloomy climate

According to the European carmakers' association, Acea, new car sales in Europe dropped by 14.5% in October, the sixth monthly fall in a row.

Peugeot Citroen's announcement is the latest in a series of drastic measures taken by car companies worldwide in order to prevent the build-up of unsold stock.

  • Japan's fifth-largest car maker, Mazda, has announced 1,300 job losses and has lowered its production target for the current financial year by 48,000 vehicles
  • Another Japanese car maker, Isuzu, is shedding 1,400 jobs and has cut production by 10%
  • General Motors has suspended production for two months and is shedding 258 jobs at its Rayong factory in Thailand
  • Toyota has also scaled down production at its Thai factory and is seeking early retirement for 340 temporary workers
  • Daimler is reportedly considering lowering the working week in Germany from 35 to 30 hours and reducing the number of its temporary workers "to increase flexibility".

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