Beko Europe announces 1,935 redundancies: What is the group's plan?

At a meeting in Rome with Unions at the Ministry of Enterprise and Made in Italy, Beko Europe set out its long-term business transformation plan for Italy after announcing the planned closure of two sites by the end of 2025 - in Siena in Tuscany and Comunanza near Ascoli Piceno in Marche, as well as the cold line in Cassinetta near Varese in Lombardy - which will result in some 1,935 redundancies.

The meeting comes after the one held on 7 November, which followed the company’s review of its European business.

"The review showed much of the production base to be underperforming financially, as a result of a challenging industry context, including increased competition from players from Asia and weakened demand. Within this context, current capacity utilisation rates in Italy are unsustainable, dropping to an average of under 40% this year – 20% less than in 2017 when European industry sales were at the same level as today. This has led to significant losses of tens of millions of euros over the past seven years," a Beko Europe press release said.

Beko's business transformation plan

The group also said that its business transformation plan will optimise existing operations and reshape the company’s presence in Italy to create a sustainable long-term footprint.

"Italy will be Beko's centre of excellence for global industrial design as well as global cooking, including research and development (R&D), underpinned by an investment of €110m. The new investment will enable the design of new products, leveraging robotics, automation and digitalisation. Italy will remain a key decision-making centre across strategic functions, including HR, marketing, supply chain, IT, R&D, and product design.

"With Italy as production hub for Cooking, Beko Europe will launch a new suite of built-in suite of products in the coming years, including a microwave, oven and induction hobs to cover the core and premium range at its plants in Melano (AN) and Cassinetta di Biandronno (VA). Operations at both these plants will be streamlined and receive investment to boost automation and efficiency," the company also said.

Beko Europe said its Carinaro plant will be maintained as the company’s European Spare Parts Distribution Center, alongside the household appliance refurbishment operations launched in 2023.

"In Laundry and Refrigeration, significant changes to current production are planned. With reference to refrigeration, the Siena site will not be the recipient of further investments due to the structural loss of competitiveness and accumulated losses over the past five years in the order of tens of millions of euros, despite significant investments made in the horizontal freezer category. With reference to washing, the Comunanza (AP) site, despite significant investments received in recent years, is in critical condition from the point of view of economic sustainability in the long term and the possibility of maintaining operations with a sustainable level of profitable production," the press release also highlighted.

Potential conversion of existing plants

Furthermore, it said a reindustrialisation plan, including the potential conversion of the existing plants, will be explored in both Siena and Comunanza.

"The Cassinetta di Biandronno (VA) refrigeration site is showing a structural loss of cost competitiveness and, among those located in Italy, is the site that has seen the highest cumulative losses realised despite the substantial investments made over the past seven years. A rationalisation of production activities will be initiated at the site, keeping production active for three of the five lines currently in operation. Redundancies related to the affected production units in Cassinetta, Siena and Comunanza are estimated at 1,151."

The press release also noted that, to align with Beko’s reshaped manufacturing base, it will adjust central functions in Milan and Fabriano.

"This includes operational and commercial roles involved in merging the legacy companies, as well as the R&D teams in Cassinetta di Biandronno, Milan, and Fabriano. These changes aim to remove duplicate structures, with estimated redundancies affecting 678 positions."

The company said it understands that the plan announced is difficult, but it is "necessary to guarantee a sustainable and competitive future" for Beko Europe’s operations in Italy.