Peugeot to lay off 5,000 of its employees in France

Peugeot intends will lay off 5,000 of its employees in France, a union official disclosed. This means that compared to previous announcement, a higher proportion of layoffs is in the company’s domestic country. Union representative Jean-Pierre Mercier at PSA’s factory in the Paris suburb of Seine-Saint Denis stated that 1,900 French manufacturing jobs would be cut, together with another 3,100 in the information technology, sales and research and development areas. In October, the company disclosed 6,000 layoffs across Europe as part of its aim to lessen costs by 800 million euros or $1.1 billion in 2012 in order to offset a tougher European market.
The losses include 2,500 contractor positions and 1,000 manufacturing jobs. The other 2,500 job reductions would come generally in Research & Development, IT, marketing and sales, PSA added. Last month, the company cautioned that its core vehicle manufacturing business would barely make a profit. As the company struggles with the downward trend in the prices in Europe, it expects its free cash flow to be negative for 2011. The company’s sales during the third quarter dropped 1.6 percent to 9.31 billion euros. How will this effect new product design, engineering and reliability?