Did Cost Cutting Play A role in Electrolux Sacking Of Doyle
When John Featherstone came on board as the head of Electrolux Australia questions were raised as to why the acting GM Michael Doyle did not get the top job.
Featherstone who had just done a stint in Singapore where his mate and now boss was located, moved to dump Doyle who has been praised by the industry for doing a good job. Ironically as Featherstone was dumping Doyle Jonas Samuelson, President and CEO of Electrolux was praising the work done by Doyle during his tenure as acting GM.
In a statement issued to Shareholder the Australian operation was singled out by the global CEO.
In a statement issued by the European appliance Company he said “During the months of March through May, we experienced significant volume drops across most of our regions due to the pandemic. As restrictions were eased or removed, demand picked up in June, even if the pace of recovery varies greatly between regions. In some markets…the recovery pace in the latter part of the quarter has been faster than predicted. It was therefore encouraging that we in June had an organic growth of 3%. I am also pleased that despite challenging conditions we improved our mix this quarter as well. A good example is Australia where newly launched products continue to gain good traction”.
The new products were not only sold into retailers by Doyle and his team they attracted global praise from senior management.
Electrolux officially appointed Chris Coen as sales director, after he was parachuted into the role following departure of Michael Doyle. One issue that Featherstone faced was that the Company was undergoing cost cutting and Doyle’s replacement was a cheaper option according to insiders.
Coen was previously product line director for taste and has been with Electrolux for the past 14 years.
At the time that Featherstone axed Doyle Electrolux was undergoing cost and cash mitigation actions initiated by the parent Company according to their latest financial reports.
The Company is looking to generate billions in cost savings between now and 2024.
Samuelson said of the last quarter which is when Doyle was axed “Despite the strong cost reduction execution in the quarter, it was not possible to offset both the 17% organic sales drop and a significant currency headwind as a result the quarter was slightly loss-making”.
He claims the COVID-19 pandemic situation remains fluid, creating an extraordinary degree of uncertainty over what the full global impact on demand will be for the second half of the year.
He said that It depends on several factors such as virus resurgences, the extent of additional restrictive measures and the effectiveness of the massive stimulus packages on consumer confidence and demand as to where Electrolux is heading.
In the near term, we see good demand, partially driven by pent-up demand and the strong stimulus programs initiated by Governments such as Australia.
However, for the full year 2020 Electrolux expect negative demand in most of our main markets.
“Hence, as previously communicated, we expect a material financial impact related to the pandemic for the full year 2020, primarily due to the impact in the second quarter” he said.
He claims that the increased time spent at home due to the pandemic has quickly changed consumer behaviour.
He concluded “Although we are experiencing a challenging time, I am confident that Electrolux remains well positioned to create value”.