Peugeot to axe 1,500 more jobs as Euro sales funk deepens

Thu, 13 Dec 2012

Peugeot has announced it will cut 1,500 jobs by 2014 as the European Union economy continues to falter. Bloomberg reports the layoffs join a further 8,000 announced back in July, and will be made by simply not replacing workers who leave. All told, the French automaker wants to slash its current workforce by 17 percent, or around 11,200 positions, by 2014, while also shuttering a facility outside of Paris and working to build strategic alliances with manufacturers like General Motors. Workers have been told the company's overall workforce will decline to 55,900 individuals in 2014. Even with those moves, analysts predict next year will one of the hardest for Peugeot in recent memory.

While 2012 saw the automaker liquidate some assets to maintain its cash reserves, that won't be an option next year. The company has been burning through those funds at a rate of around 200 million euros per month, and has announced its net debt will be somewhere around 3 billion euros at the end of 2012. In response, Moodys cut the automaker's long term debt rating to three levels below investment grade. In October, the French government voted to give Peugeot up to 7 billion euros in new bonds, and the measure should be fully adopted by December 19.

By Zach Bowman